Supplementary budget: Power, debt, security widen gaping budget hole

Parliament approves Rs387b in additional expenditure for the outgoing fiscal year.

ISLAMABAD:

The National Assembly on Thursday approved Rs387 billion in supplementary budget for the outgoing fiscal year amid sharp criticism by the opposition over massive spending without parliament’s approval.

The opposition termed the government’s spending over and above the budget approved by parliament last June a glaring example of “maladministration and inefficiency of the government.”

Finance Minister Dr Abdul Hafeez Shaikh tabled the budget overrun, equal to 2.2 per cent of the total size of the economy, for the approval of the National Assembly.

While the government had estimated a four per cent budget deficit for the outgoing fiscal year, the budget overrun would take that figure to roughly six per cent of GDP.

Budget overrun

As much as 87 per cent or Rs336.3 billion of the supplementary budget was spent on plugging the inefficiencies of the power sector. Another 12 per cent was spent on defence and security related expenditure.

The NA also approved Rs178 million for supplementary allowances and pensions, Rs15.8 million for Presidency’s renovation and Rs336.7 million for payment of mark-up on Pakistan Railways debt.

Other heads in the supplementary budget included Rs95.8 million for President’s staff’s expenses, Rs31.8 billion on domestic debt servicing and Rs14.2 billion on short-term foreign debt servicing.

“There is nothing unusual with a supplementary budget,” said the finance minister, adding that the constitution empowers the government to spend the additional funds.”

Shaikh said that the prime minister and the presidency related overspending is on account of employees’ expenses.

‘Maladministration’

“The book of supplementary grants is a clear reflection of the inefficiency of the government, maladministration and mismanagement of the economy,” said Engineer Khurram Dastagir Khan of Pakistan Muslim League-Nawaz.

It was preposterous that the government was withdrawing subsidies for the poor but granted Rs10.8 billion in subsidy to oil refineries and marketing companies, he added.

The opposition demanded that in future, the government should table supplementary grants above Rs1 billion for parliament’s approval.

Published in The Express Tribune, June 24^th, 2011.