Punjab, K-P risk ‘financial shutdown’

Caretaker govts weigh options of fresh budgets for next four months

LAHORE:

The caretaker governments of Punjab and Khyber-Pakhtunkhwa (K-P) are heading towards a possible financial shutdown, as the period of one-time authorisation of the expenditure for four months will come to an end later this month.

According to Article 126 of the Constitution, a caretaker government can only authorise four-month expenditures from the Provincial Consolidation Fund in any financial year, and that, too, for one time only. The said authorisation was used by the Punjab and K-P caretaker cabinets in third week of June this year.

That authorisation is dubbed as four-month budget that was approved under the Article 126 of the Constitution. It was claimed at that time that on the expiry of the four-month period the respective governments would bring a new four-month budget.

Article 126 titled, “Power to authorise expenditure when Assembly stands dissolved” reads: “Notwithstanding anything contained in the foregoing provisions relating to financial matters, at any time when the Provincial Assembly stands dissolved, the Provincial Government may authorise expenditure from the Provincial Consolidated Fund in respect of the estimated expenditure for a period not exceeding four months in any financial year, pending completion of the procedure prescribed in Article 122 for the voting of grants and the authentication of the schedule of authorised expenditure, in accordance with the provisions of Article 123 in relation to the expenditure.”

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Interestingly, The Express Tribune recently reported that the K-P was busy preparing budget for the November-February period. Given that the budget in both these provinces was approved in this financial year, the restriction placed by the Article 126 stands applicable.

When asked, relevant officials in both these provinces recognised the issue, claiming that something must and will be done to work a way around it. A Punjab Finance Department officer admitted that indeed, there was a limitation placed by the Constitution.

The officer said that the issue would be addressed in consultation with the law department. Another officer said that the matter had been taken up with the finance secretary, adding that “now the matter must have been raised with the law department”.

However, Punjab Law Secretary Ahmad Ali Kamboh told The Express Tribune that finance department had not taken up the matter with them thus far. He said that once the matter lands in his department, a decision would be taken after reviewing the finance department query.

When asked why the law department did not initiate this issue on its own, he said that there were limitations regarding giving any unsolicited advice. Caretaker Information Minister Amir Mir, when approached, said that the matter should be directed to the finance secretary.

Speaking on condition of anonymity, a senior official said that the government, if allowed to fly under the radar, might opt for bringing a new budget for another four months of the current fiscal year, as announced previously.

But when asked whether the government could do it legally, the official replied in a lighter vein that several other illegalities had been committed by this caretaker setup, so “if those were not the problem, then why this”.

He pointed out that there was a provision in the Article 124 that states: “If in respect of any financial year it is found— (a) that the amount authorised to be expended for a particular service for the current financial year is insufficient, or that a need has arisen for expenditure upon some new service not included in the Annual Budget Statement for that year…”

But when pressed further, whether the four months provision could be read as ‘insufficient’ or whether “any unforeseen reason’ had arisen, he replied in no. He also hinted at the possibility of an ordinance by governor. When asked again would the ordinance override Constitution, he again replied in negative.

He stressed that a whimsical interpretation had to be drawn to work a way around this issue. He also suggested that approaching the court on the matter would be a wise move, as court, while realising the necessity, would allow this.

The officer explained that the only account from which the government was making all its expenditure was the Provincial Consolidated Fund and if the government was denied access to the fund after the “four months” period, it would mean “a financial shutdown”.

In that scenario, the officer continued, the government would have no money for the pays and pensions, issuing funds for the ongoing development schemes, or paying the utility bills. “This would also mean that even the judges will not get their salaries.”

A senior officer in the K-P law ministry said that they were preparing for bringing a new budget to cover the next four months. When asked about the legal limitation, he said “no worries we will sort it out”.

Caretaker K-P Finance Minister Ahmad Rasool Bangash said that the only way forward was a new four months budget, adding that without the budget governments would not be able to function.

When asked about the legal limitation, he said that October had started and the current budget would remain effective till the end of this month. “And after that we will see. We are not the only one here, Punjab is also in the same boat,” he added.

“We said we would seek guidance from the law officer and the advocate general,” he continued. He said that he had taken up this office only a month ago, so he would have to check this matter with the law department before giving any opinion.

However, Kunwar Dilshad, adviser to the Punjab chief minister, said that there was no risk of “a financial shutdown” because there was no legal hurdle in approving the budget for another four months. “The impression of any legal impediment is wrong,” he added.

When asked to explain his viewpoint on the matter, Dilshad replied that he would go through the legal provisions on this subject in a day or two and then get back to The Express Tribune.