Fixing the budget oversight

Parliament’s constitutional ‘power of the purse’ is meant to anchor democratic control over public money, yet in Pakistan the reality rarely lives up to the principle. The constitution and the Public Financial Management (PFM) Act 2019 oblige the executive to furnish four core documents to the National Assembly every year: a Budget Strategy Paper (BSP) approved by the federal cabinet no later than May 10 following amendments to the original March 15 deadline; a Fiscal Risk Statement alongside the annual budget; a Half-Yearly Budget Review by end-February; and quarterly debt and contingent-liability reports.

Between FY2020 and FY2024, fewer than half of these papers were tabled on schedule, and even when delivered, the ensuing debate was perfunctory and almost never resulted in altered appropriations. As far as I understand, the Budget Strategy Paper, which was required to be presented to the Standing Committee on Finance, has still not been presented. In the same period, supplementary grants totalling roughly over Rs1.3 trillion were retroactively regularised – contravening section 23 of the Public Financial Management (PFM) Act 2019, which requires ex-ante parliamentary approval.

Committees theoretically possess expansive summons powers and may recommend reallocations, yet they seldom exercise them, hamstrung by skeletal secretariats, patchy data access and an ingrained reticence to confront the executive. It is into this vacuum that the Parliamentary Budget Office (PBO) Bill 2025 has been proposed. Modelled on the United States Congressional Budget Office (1974), Canada’s Parliamentary Budget Officer (2006), Australia’s PBO (2012), and South Korea’s National Assembly Budget Office (2003), the bill will establish a non-partisan research arm tasked with costing legislation, projecting debt paths, and issuing public assessments of the macro-fiscal outlook.

In those comparator countries, offices manned by dozens – and in the CBO’s case, hundreds – of economists, statisticians and policy modellers have become indispensable to legislative deliberation: the US Congress will not vote on a major bill without a CBO ‘score’; both major parties trust Australian election-policy costings; and South Korean programme evaluations by NABO routinely trigger reallocations.

The attraction of grafting such a model onto Pakistan’s legislative architecture is obvious, yet transplantation may fail if the political and administrative soil is inhospitable. The National Assembly’s Standing Committee on Finance and the Public Accounts Committee (PAC) already possess the authority to summon officials, scrutinise accounts and propose amendments, but they operate with limited staff and even more limited analytical bandwidth. However, their findings and recommendations are not binding on the executive.

Adding a new institution risks duplicating mandates while diluting responsibility. Cost is another hurdle: Australia’s PBO consumes about AUD9 million a year, near Rs1.6 billion, chiefly in specialist salaries. Even if parliament sets aside comparable funds, success would still hinge on the executive’s willingness to share comprehensive, timely data; without it, the PBO would produce elegant but hollow spreadsheets.

Implementation risk is heightened by Pakistan’s record of legislative inflation, which creates new authorities instead of enforcing existing laws. Celebrated as a transparency milestone, the PFM Act itself remains under-implemented. After the SOE (Governance and Operations) Act 2023, dozens of state-owned-enterprise boards were restructured on paper, yet many still await independent directors and timely audited statements. A PBO could join this shelf of worthy but toothless institutions unless parliament first proves it will insist on, debate and act upon the information it already commands.

The primary bottleneck is not architecture but analytical capacity and political will. Lawmakers typically receive multi-volume budget books only a few days before the vote; few have formal training in public finance, and constituency pressures divert focus toward local projects rather than macro-fiscal sustainability. In theory, a full-scale PBO could bridge that gap by translating dense tables into digestible briefs. Yet a leaner, more immediate solution exists: bolster the Research and Legislative Drafting Directorate with a Budget Analysis Unit (BAU) of eight to ten macro-fiscal specialists seconded for three-year fellowships from the State Bank, reputable audit firms, universities, and multilateral partners. Such a unit could start costing bills, testing revenue assumptions, and briefing committees within months at a fraction of a PBO’s expense, scaling only once legislators prove sustained demand.

At the same time, appropriate PFM Act amendments could hard-wire accountability without spawning another entity. Parliament/Standing Committee on Finance and Public Accounts Committees should have the power to impose penalties / public censure on ministries that miss statutory filing deadlines. Open, time-bound hearings on the BSP and Half-Yearly Review should be mandatory, with civil-society submissions posted online within 48 hours. Critically, the budget presented after vetting by the IMF must not be treated as untouchable; members must subject it to rigorous clause-by-clause scrutiny, proposing evidence-based amendments where warranted. None of this requires novel legislation – only the courage to use existing and proposed additional powers.

International experience is unequivocal: independent fiscal offices thrive where legislatures defend their autonomy and embed their analysis in decision-making. The UK offers a nuanced counter-example: it relies on the executive-branch Office for Budget Responsibility, yet the House of Commons Library’s small Scrutiny Unit still equips a formidable Treasury Committee capable of grilling chancellors line-by-line. In Germany, the Bundestag’s Research Service underpins a Budget Committee endowed with a constitutional veto over appropriations; German MPs will block a budget that lacks credible detail. By contrast, Ghana’s PBO (2018) languishes for want of funds and data, while Croatia’s fiscal office is so thinly staffed that parliamentary groups outsource analysis to think-tanks. Form without force is futility.

Pakistan can ill afford futility when public debt hovers near 80% of GDP, interest payments swallow more than half of federal tax revenue, and the country remains under IMF surveillance to avert default. Citizens already perceive budgets as distant rituals unmoored from service delivery. Restoring trust requires that allocations be visibly tied to measurable outcomes and that overruns be explained before, not after, they occur. These improvements can arrive sooner by enforcing the PFM Act (with targeted tweaks) and up-skilling committees than by launching a PBO whose independence and funding would be contested in an increasingly polarised arena.

None of this means the PBO idea should be discarded. It may serve as a long-term aspiration, a legislative stake in the ground signaling parliament’s commitment to deeper scrutiny once foundational deficiencies are addressed. A pragmatic sequencing could sunset key clauses: let the lean BAU operate for three fiscal cycles, during which parliament must certify utilisation benchmarks – costings requested, briefs delivered, debates influenced. Only after meeting those benchmarks would the full-fledged PBO, with its larger staff and statutory guarantees, come into force. This phased approach echoes South Korea, where an initially modest NABO was empowered only after the legislature demonstrated it could absorb the analysis.

Ultimately, fiscal accountability hinges less on institutional logos than on legislative muscle. Lawmakers must first demonstrate that they will demand the documents already due, summon ministers when deadlines slip, and vote amendments when national priorities conflict with executive proposals. Equipping them with a cadre of skilled analysts and strictly enforcing existing reporting requirements will test that resolve quickly and cheaply.

If those reforms take root, an expanded Parliamentary Budget Office – embedded through amendments to the PFM Act rather than via additional new legislation — could then elevate oversight to global best practice. Until that day, the wisest course is to fix the budget oversight we ostensibly possess before adding another layer that risks widening the gap between statute and reality.

The writer is a former managing partner of a leading professional services firm and has done extensive work on governance in the public and private sectors. He tweets/posts @Asad_Ashah

Disclaimer: The viewpoints expressed in this piece are the writer's own and don't necessarily reflect Geo.tv's editorial policy.

Originally published in The News