The announcement of Pakistan’s federal budget for the fiscal year 2024-25 is currently in an unusual state of uncertainty, with several key customary components still missing. This situation has cast significant doubts on whether the budget will be presented in parliament on June 10, as initially planned. According to sources, the critical National Economic Council (NEC) meeting, which is essential for reviewing the current year’s macroeconomic situation and development program and approving the next year’s economic and development agenda, has yet to be scheduled. Furthermore, the government has not yet constituted the National Economic Council.
Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb will be on a four-day visit to China, rendering them unavailable to lead key consultations until June 8. Thus, the earliest possible date for an NEC meeting could be after June 8, provided that the relevant documentation with provinces, the prime minister, and the president is circulated through electronic means for constituting and notifying the NEC.
Under Article 156 of the Constitution, the president is ultimately required to constitute the NEC, led by the prime minister as its chairman. The council comprises the four chief ministers and one member from each province nominated by the respective chief minister, along with four other members, typically key federal ministers, as the premier may nominate. This council is tasked with reviewing the overall economic condition of the country and formulating plans regarding financial, commercial, social, and economic policies, ensuring balanced development and regional equity.
Officials confirmed that the NEC had not been notified as of Monday night. Interestingly, the Annual Plan Coordination Committee (APCC) continued its meeting on Monday, although the Planning Commission had announced last week that the forum had recommended to the NEC a Rs1.221 trillion development budget for the federal government, along with a 3.6 percent growth target for the current year. It was also confirmed that this was the first time the APCC meeting, led by Planning Commission Deputy Chairman Jehanzeb Khan, had taken place without even informing the planning minister about its schedule or the development and macroeconomic indicators.
The planning minister, who was on a visit to China and Malaysia, was reportedly shocked to learn upon his return that he had been completely bypassed. The APCC meeting on May 31 was also unusual, as it missed some major sectors in the allocation of funds and project reviews, including the National Highway Authority, the Ministry of Finance, its development portfolio, and the water sector. As a result, some changes could not be ruled out by the time the NEC meeting is called, although the political head of the planning ministry appeared helpless for now. According to the rules of business, the planning minister must authorize and sign the summary of the APCC recommendations for presentation to the NEC.
Moreover, the aspirations of the governments of Azad Kashmir and Gilgit-Baltistan have also remained unaddressed, as their development portfolios for the next year have been kept frozen at the current year’s level of Rs51 billion each. The two leaderships were in hectic contact with the ministers for finance and planning on Monday.
An official who attended the second-round APCC meeting on Monday said the sectors missed on May 31 were “cleared” on June 3, but the overall envelope of the federal Public Sector Development Programme (PSDP) would remain unchanged at Rs1.221 trillion, as indicated by the Ministry of Finance. These agencies were told they could prioritize their development projects within their allocated budget. For example, the Higher Education Commission was informed that its allocation would remain at Rs21 billion for the next year, against Rs63 billion in the current fiscal year, but they should update their priority projects for inclusion within a day.
It is also unusual that the budget strategy paper (BSP) for the next fiscal year has not yet been shared with parliament. This delay is largely due to political uncertainties stemming from the legal status of reserved seats and the absence of standing committees in the Senate and the National Assembly, particularly those related to finance. This will be the first time in recent history that the BSP has not gone through the parliament, with no time left for this exercise. Customarily, the BSP, which outlines the broad budget allocations, is presented to these standing committees of parliament.
It would be even more unusual for the federal budget, prepared in consultation with the IMF, to go directly from the federal cabinet to parliament without the review and debate of the parliamentary committees, should the Senate and National Assembly standing committees on finance not be constituted. Sources in the Finance Ministry indicated that they expected to present the budget to the federal cabinet and the parliament on June 10. However, this now appears difficult given the latest situation on the ground.
Even if the NEC is constituted and convened on June 8 immediately after the prime minister’s return, it would be a very tight schedule to present the Economic Survey and the budget on June 9 and 10, respectively. Nonetheless, they noted that in 2018, the macroeconomic plan and development agenda were not approved by the NEC when three chief ministers walked out and boycotted the NEC meeting presided over by then Prime Minister Shahid Khaqan Abbasi. The PSDP and the budget for the following year were selectively revised by the preceding PTI government.
