Pakistan’s budget has been delayed not because the speech is unfinished, but because the settlement behind the speech is incomplete. What the PML-N and PPP have crafted is not fiscal reform; it is fiscal improvisation.
Here are four realities. First, the centre needs more than Rs2 trillion. Second, the provinces have a constitutional share in the federal divisible pool. Third, the IMF wants fiscal discipline. Fourth, Pindi wants strategic space.
So, the PML-N and PPP have produced a workaround: preserve the form of the NFC, bend the flow of money, and create temporary fiscal room for one budget cycle. Mistake: this is not reform. This is rental fiscal space. The centre has not created money; it has borrowed room from the provinces. For one year. Next year, the rent will be due again.
Red alert: This may please Pindi today. But it postpones reform -- and guarantees that the same battle will return with the next budget.Fact 1: This is not a cash-flow problem. Fact 2: This is a structure problem.
The centre does not need temporary money; it needs permanent fiscal capacity. The provinces do not need arbitrary cuts; they need clearly defined spending responsibilities and stronger own-source revenue. Rawalpindi does not need one-year reassurance; it needs predictable fiscal space. The IMF does not need accounting tricks; it needs durable discipline. And the citizen does not need another budget bargain; the citizen needs services.
The real problem is this: Pakistan’s federal fiscal structure no longer matches Pakistan’s federal spending obligations.
History is witness that temporary arrangements create annual uncertainty. History is witness that temporary arrangements weaken fiscal discipline. History is witness that temporary arrangements confuses accountability. History is witness that temporary arrangements damage development. History is witness that temporary arrangements mislead strategic planners.
Here’s the real solution: Pakistan needs a new fiscal compact between the centre and provinces. The NFC should not merely divide money; it must also divide responsibility. The Centre must cut waste, rationalise expenditure and build permanent fiscal capacity for debt, defence and strategic needs. Without a clear settlement on who collects, who spends, who borrows and who delivers, every budget will remain an annual exercise in fiscal improvisation.
The writer is an Islamabad-based columnist.
