EVERYTHING has its first time. So the saying goes. Therefore, it should not come as a surprise that Pakistan’s political economy is going through a change. Premature dissolution of the Punjab and KP assemblies. However, the constitutionally required 90 days passed without the provincial legislature elections taking place. This hold-up carries on. Without altering the Constitution, the caretaker governments’ terms were ‘extended’. The current budget session has made the situation more challenging. In light of the caretakers’ recent announcements of their individual spending intentions for the first quarter of FY24 in preparation for the upcoming general elections, a new discussion about whether they have exceeded their financial authority has emerged.
Khyber Pakhtunkhwa’s interim administration has published a Rs462.4 billion spending plan for the first four months (July to October) of the upcoming fiscal year.It has increased salaries by up to 35 percent and pensions by 17.5 percent in line with the federal budget, and it intends to spend around a quarter of the overall budget on development initiatives.The four-month budget projects a deficit of Rs19.8bn with total expenditures of Rs462.4bn and revenues of Rs442.6bn. briefing at the cabinet room of the Civil Secretariat featured Himayatullah Khan, the KP adviser on finance, who highlighted the key aspects of allowed expenditure.A total of Rs350.4 billion has been set aside for current expenses under the July-October budget plan, including Rs 309.5 billion for settled districts and Rs 40.5 billion for merging districts.
Our election regulations limit caretaker governments to carrying out routine duties and helping the ECP stage elections. They lack the authority to make important policy choices like additional taxation or sign important contracts. This is in accordance with Article 126 of the Constitution, which limits any attempt to make significant financial choices by allowing provincial caretaker setups to only ‘authorise’ expenditure for a term not exceeding four months. This raises concerns about some of the interim measures announced by the two governments. Given that caretaker arrangements place a heavy financial strain on provincial exchequers, as in KP’s case, may these arrangements raise the salary and pensions of its employees? After all, this does not fall within normal duties, and the provinces are not required to adhere to federal directives in this regard. Can Punjab eliminate taxes on the IT industry, despite the potential benefits for IT-based businesses? Or ought its guardians to establish a fund for journalists? Since this is a novel scenario, there are no simple solutions. To safeguard a precarious democracy, however, the guardians must make an effort to stay within the bounds that the Constitution and election regulations have established for them.
