IMF Urges Pakistan to End Special Treatment for Parliamentarians’ Projects

The International Monetary Fund (IMF) has called on Pakistan to abandon special treatment for parliamentarians’ projects and integrate them into the Public Sector Development Programme (PSDP) through regular approval processes. The global lender has also urged the government to avoid mid-year budget adjustments without prior parliamentary approval, emphasizing the need to respect Parliament’s supremacy, reported Express Tribune. In its Governance and Corruption Diagnosis Assessment report, the IMF highlighted the lack of scrutiny in approving parliamentarians’ schemes, which are currently overseen by the Steering Committee on SDGs Achievement Programme, chaired by Deputy Prime Minister Ishaq Dar. Unlike PSDP projects, these small-scale community welfare schemes bypass rigorous approval processes, raising concerns about inefficiency and wastage. Last fiscal year, Rs. 61 billion was spent on these schemes, with Rs. 70 billion allocated for the current year. Critics argue that such spending outside the PSDP framework diverts resources from high-priority projects and results in less effective utilization of funds. The IMF has recommended limiting PSDP allocations for new projects to 10% of the total budget to prevent the dilution of resources. It also urged the Ministry of Planning to prioritize high-impact projects and eliminate politically motivated allocations that fall outside the federal government’s jurisdiction. The report criticized the Finance Ministry for failing to involve the federal cabinet and Parliament in pre-budget discussions, including the timely approval of the Budget Strategy Paper. The IMF has advised advancing the publication of the strategy paper to January, six months before the budget presentation in June, and including macroeconomic and fiscal indicators. Additionally, the IMF recommended analyzing the accuracy of previous macroeconomic forecasts and budget estimates to improve fiscal planning. The IMF reiterated its long-standing demand for Pakistan to abandon the use of supplementary grants without prior parliamentary approval. It suggested creating a contingency pool to address unforeseen expenditures, such as natural disasters, instead of relying on mid-year budget adjustments. Currently, the government often issues supplementary grants during the fiscal year, seeking ex-post facto approval from Parliament. For instance, Rs. 5.8 billion was recently allocated for flood relief, while Rs30 billion was authorized for a foreign remittance subsidy after intervention from the Prime Minister’s Office. The fiscal year has just begun, yet supplementary grants are already being issued. This week, the Economic Coordination Committee (ECC) approved Rs. 250 million for the National Security Division’s Strategic Policy Planning Cell and Rs. 3.5 billion for subsidies on RAAST QR Code-based payments. In another key recommendation, the IMF proposed amending the Public Procurement Regulatory Authority (PPRA) laws to eliminate preferential treatment for state-owned entities and charitable organizations in public procurement. The changes aim to enhance transparency, efficiency, and accountability in the procurement process.