September 30, 2020

Pakistan Budget Has Lost It’s Credibility, World Bank

The World Bank has said in their report that Pakistan’s budget has lost it’s credibility. The World Bank released a Public Expenditure and Financial Accountability (PEFA) report in June 2019, analyzing the fiscal year 2015-16, 2016-17 and 2017-2018. The data collected was from the previous government’s period and did not analyze figures from FY 2018-19. However, the issues highlighted in the report remain unchanged even under PTI’s government (in the FY2018-19).

The report was issued in June and claimed that ‘Pakistan’s budget has lost it’s credibility and public finance management was also deteriorating’, the finance ministry requested the WB to soften their report but they refused to do so.

The WB carried out a similar study back in 2012 and the report issued back then showed better results than the current ones. In 2012 Pakistan got five A grades, eight B grades, six D grades and ten C grades. However, in the report issued on June 2019, Pakistan has no A grade, ten B grades, eight C grades, eight D grades and overall Pakistan got the lowest score and was awarded a D grade.

The report said that Pakistan was lagging behind in many key points namely, the classification of budget, comprehensiveness of budget information, transparency in inter-governmental fiscal operations, participation in budget process and predictability of direct budget support.

The recommendations made in the report are still not under consideration. The WB had recommended in their report to make the Auditor General of Pakistan ‘independent’ for effective oversight of expenditures. The report pointed out many issues in the financial system of Pakistan including the weak financial discipline, inflated revenue targets and under developed cash management system.

The ministry of finance refused to comment on the report and said that the report is yet not final.

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