A Critical Evaluation of the Budgetary Process for Public Expenditure in Pakistan

Sarfraz Khan Qureshi

Abstract


Over the past decade budgetary policies have emphasised a firm
restraint on the growth of total expenditure and a restructuring of the
profile of both current and development expenditure to deal with a high
fiscal deficit in Pakistan. Regarding current expenditure, there has
been an increasing emphasis on meeting fully the recurrent cost
requirements of completed public investments and on the minimisation of
the costly subsidY programmes. Development expenditure has been
increasingly directed towards the priority sectors pertaining to
physical and social infrastructure and to early completion of the
on-going development projects. Effective public expenditure management
places heavy demands on existing government institutions and has a much
wider scope than the formulation and implementation of conventional
expenditure budgets. The formulation of an appropriate macroeconomic
framework, selection of projects on a sound basis, prqper designing of
public sector investment programmes and appropriate linkages between
planning and budgetary processes is as, if not more, important than the
narrow focus on expenditure budgeting [Hussain (1979»). Notwithstanding
the importance of these broader aspects of budgetary issues, this paper
does not deal with such public expenditure management issues. Instead it
concentrates on a description and an analysis of the formulation process
of government expenditure budgeting. The conventional practice in
Pakistan in the formulation of expenditure budgets is based on the
''bottom-up" demands of various government agencies. Feats regarding the
adverse consequences of deficit financing with respect to macro
instability have persuaded the government to impose constraints on total
expenditure. Donor agencies, especially the International Monetary Fund,
have been instrumental in the imposition of 'top-down' constraints on
the 'bottom-up' demands.

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DOI: https://doi.org/10.30541/v32i4IIpp.975-989

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