Why the SC’s ruling is crucial in controlling spending

ISLAMABAD: The decision of the Supreme Court of Pakistan to reject the government’s review petition against curtailment of discretionary spending powers of the prime minister and put a stop on unchecked supplementary grants issued by the finance ministry may severely affect the government’s business.

Many see the Supreme Court’s judgement as an important milestone in restoring the principle of trichotomy of power, as enshrined in the Constitution of the Islamic Republic of Pakistan. Some say, including many government functionaries, that the verdict will choke official business.



It is the government that has to be blamed, if there are difficulties in conducting the official business after the SC’s historical judgement. The finance ministry did not care for the laws and rules while taking decisions on fiscal matters. It discretionally increased taxes and issued supplementary grants, often secretly. The parliament would come to know about these supplementary grants at the end of the fiscal year.

The Supreme Court on Friday rejected the federal government’s review petition against the court’s August 18th verdict that curtailed the premier’s discretionary powers in fiscal matters. A three-judge bench, headed by Justice Mian Saqib Nisar, had reviewed the petition filed by the federal government against the top court’s August 18 verdict wherein it ruled that the prime minister cannot act unilaterally on the country’s financial issues or approve any ordinance without first gaining the federal cabinet’s approval, citing constitutional strictures.

The SC has ruled that budgetary expenditure or discretionary governmental expenditure can only be authorised by the federal government ie the cabinet, and not the prime minister on his own.

The government was hopeful that the apex court would review its decision but the rejection of the petition would now increase its problems at a time when the ruling party was planning to open coffers ahead of upcoming general elections.

What appeared to be subordination of economics over political considerations, the PML-N government announced 50% increase in the salaries of the Frontier Constabulary and upgraded pay scales of the Islamabad Police ahead of Pakistan Tehreek-e-Insaf’s planned November 2 lockdown.



The SC’s ruling will hopefully put an end to such arbitrary decision making. “Neither a secretary, nor a minister, the prime minister are the Federal Government and the exercise, or purported exercise, of a statutory power exercisable by the Federal Government by any of them, especially, in relation to fiscal matters, is constitutionally invalid and a nullity in the eyes of the law,” says the judgement.

“Similarly budgetary expenditure, or discretionary governmental expenditure can only be authorised by the Federal Government ie the Cabinet, and not the Prime Minister on his own,” reads the judgement.

This was the most severe curtailment on the finance ministry that is in the habit of understating expenditures during budget times and then issues supplementary budgets during the course of the fiscal year.

The constitution assigns the SC the responsibility of maintaining harmony and balance between the three pillars of the state, namely, legislature, executive and judiciary. And the SC’s judgement is a step towards that direction. The idea is to ensure state organs perform their respective functions within stipulated limits and constraints.

There was hope that after SC’s landmark judgement of August this year, the Economic Coordination Committee (ECC) would stop taking unilateral decisions on fiscal matters and the constitutional tripartite structure of power that the ruling Pakistan Muslim League-Nawaz severely compromised during its three-year rule would again be restored.

Although the government started taking ECC’s decision to the federal cabinet for vetting, this did not fully address the issue. The ECC made decisions on the matters, which should have been initiated by the federal cabinet.



During the past three years, both parliament and the executive failed to implement the Constitution in its true letter and spirit, said SC lawyer Dr Ikramul Haq. “Parliament played the role of a silent spectator when the executive was seizing its powers,” he added. The government claims that the parliament has delegated its powers to the executive but legal experts do not agree.

The way the federal government was using the parliament’s powers cannot be called delegation rather its abdication of the powers, says Haq.

In its judgement, the SC ruled that the ordinance making power can only be exercised after a prior consideration by the cabinet. An ordinance issued without the prior approval of the cabinet is not valid, it ordered. Similarly, no bill can be moved in parliament on behalf of the federal government without having been approved, in advance, by the cabinet. The cabinet has to be given a reasonable opportunity to consider, deliberate on and take decisions in relation to all proposed pieces of legislation.

The PML-N government flouted these principles. It promulgated presidential ordinances to change tax rates on CNG, collecting Gas Infrastructure Development Cess, reducing withholding tax rates on banking transactions to appease its voters.

One hopes that after rejection of the review petition, the government will stop the practice of increasing tax rates on petroleum products through SROs. Against the standard sales tax rate of 17%, the government is currently charging 33% tax on high-speed diesel, which is largely consumed in the public transport and by the agriculture sector.

The writer is a staff correspondent

Published in The Express Tribune, November 7^th, 2016.

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