The Budget-Making Process
Since the 18th Amendment, provinces in Pakistan have assumed greater responsibility for delivering health, education, agriculture, and local infrastructure. This shift makes provincial budgets even more critical for citizens. Here is how these budgets are made, step by step:
1. Budget Call Circular (BCC): The finance department issues a BCC to line departments, requesting proposals and expenditure estimates for the upcoming fiscal year. This circular sets the fiscal framework and policy priorities.
2. Departmental Proposals: Each department prepares its budget based on policy priorities, past performance, ongoing projects, and new initiatives. These include both current (recurrent) and development (PSDP) spending proposals.
3. Review and Consolidation: The finance department reviews all submissions, aligns them with fiscal limits, and consolidates into a draft provincial budget. This phase involves intense negotiations — departments typically request 30-50% more than the available resource envelope.
4. Cabinet Approval: The draft budget is presented to the provincial cabinet for policy vetting and approval before it is tabled in the assembly.
5. Legislative Approval: The budget is presented before the provincial assembly for debate, possible amendments, and final approval. This is where elected representatives scrutinise allocations and hold the government accountable.
"Provincial budgets shape our everyday experiences — from the condition of roads to the quality of schooling. Understanding and participating in the budget process is a democratic right and responsibility."
Why It Matters
Local Impact: Provincial budgets directly affect service delivery in education, public health, infrastructure, agriculture, and drinking water. If the Punjab education budget is underspent, schools lack textbooks. If Sindh's health allocation is diverted, hospitals run short of medicines.
Fiscal Autonomy: Provinces control a large portion of national spending. Under the 7th NFC Award, 57.5% of divisible pool taxes are transferred to provinces — giving them significant fiscal power and responsibility.
Citizen Engagement: Informed citizens can push for participatory budgeting and hold their representatives accountable. Several Pakistani civil society organisations now conduct provincial budget analysis to track education, health and social protection spending.
Recommendations
Strengthen provincial PFM systems to improve budget execution rates, which often lag at 80-85% due to capacity constraints. Expand citizen budget briefs in Urdu and regional languages. Introduce participatory budgeting pilots in select districts. Enhance transparency through online provincial budget portals.
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