The National Budgeting process of Pakistan fails to entertain and cater the national aspiration of the fiscal demands and people, hence severely disappoint year by year the people and the institutions of country every time. To fill this , this paper considers a number of Problem areas in Budgeting Policies, Processes, and Priorities along with concise yet clear indicative studies.

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3. RE-Engineering the Fiscal Budget of
Pakistan
By
Muhammad Waqas
Raza Siddiqui
C.A Finalist, ICAP.
Cell No. 0345 28 99 607
Email Id : waqasrazas@hotmail.com

4. Introduction
The National Budgeting
process of Pakistan fails to entertain
and cater the national aspiration of
the fiscal demands and people,
hence severely disappoint year by
year the people and the institutions
of country every time. To fill this ,
this paper considers a number of
Problem areas in Budgeting
Policies, Processes, and
Priorities along with concise yet
clear indicative studies, it also
discuss whether adopting such a
budgeting system after revisiting
the entire process can meet the
country’s fiscal needs in an
Endeavour which fulfill the demand
and aspiration of Country and its
fellow men, For sure Pakistan needs
to redesign features and
accommodate such into its
budgeting system to ensure that it
does so what stated above.

5. Policies
The policies that
are under examination in this
study are of the vary primal in
nature, the discussion would only
revolve around the two basic
cores of policies, first regarding
Fiscal, Disarray of National
Budgets, as have always been
adopted and secondly the
Diasporas the Pakistani
economy have long been
suffering from but still not
addressed in Budgeting, causes
not only the hindrances to
economic growth but the entire
fiscal Budgeting mechanism have
always been the first and
foremost sufferer.

6. Priorities
The priorities
that incubate to become the biggest
obstacles in not only the entire
budgeting process but of the
Pakistan’s slow and sluggish growth
right from the independence are of
no dispute, however some may
disagree beside being evident of the
lethal affects of aforesaid, on other
grounds purely of non economical
reasons along with of the little
worth at the same time. The huge
scale Defense expenditure as
always been the biggest priority in
the books, along with the latest
decay long development paralyzing
war against terror which affect
economy deeply in no time from the
first day it was brought in the lands
of pure.

7. Processes
Finally, the processes do cover only the
aspects of fiscal resources or revenue generation arrangements,
mainly and directly constitute of the tax system of any country,
and the expenditure it does to attain the prospects and objects of
budget.

8. Conventional Fiscal Performance Cycle
In any conventional fiscal cycle the role of
Budget can be illuminated by the help of following simple yet
powerful diagrammatic cycle, In context of Pakistan and our
aforesaid three pillars, of fiscal Budget we have considered, if we
suppose the Long terms Structural Determinants, Contemporary
Politics and Fiscal Institution in the given diagram equivalent to
respectively the Policies, Priorities and Processes of our study
manifestations, the picture would be quite clear and grasping. The
need to over tide the diagram with our assigned tags is to
establish the vivid connection of our study with global perspective
which we are about to explore and construct.

9. Chapter 01
National Fiscal Disarrays
Fatal Mistakes , Fallacies in Public Policy Making
Healthy people healthy country
Human Capital Neglected severely (Hospital and Training etc)
Sorry state of Education
Secure State or Scarce State
Particularly, in case of Pakistan, the foremost plight as always
been of the plight of Policies, The disarrays, from the policies undermining the socio
economical important sectors being taken for granted such as Health care, Education,
Justice and so on to the policies creating embargoes for afore said sectors by giving so
much importance to lesser deserving sectors. I called such are Fatal Mistakes, always
observed in setting the fiscal budgets and their directions, leading to sluggish growth
in regions comparatively and lesser poverty reduction hence lesser affective fiscal
developments
Planning Fiasco Conflict of Interests, Never been reduced
Unsustainable Growth, Reparations
Sick orientation, Services or Manufacturing or Agricultural Economy??
Economy??

10. Chapter 02
Fiscal Disasters in Pakistan
The governments mainly relied on
borrowing as the only measure of “practical and political
value” for easing Pakistan's balance-of-payments difficulties.
But because the credibility was less than perfect, loans from
international institutions and banking systems, in addition to
inter-governmental credits were mostly on a short-term basis
and often with higher interest rates. When credibility
worsened -coupled with limited borrowing possibilities,
repayment of these accumulated short-term loans became a
real burden on the economy
Corruption
Instability
Unsustainable Growth

11. Chapter 03
Defense or Demise and
War against Terror or Economy??”
Pakistan’s economy is under pressure of the War on Terror
intensifying for last four years in Afghanistan. Since 2006, the War has
spread like a contagion into settled areas of Pakistan that has so far, cost
the country more than 35,000 citizens,3500 security personnel,
destruction of infrastructure, internal migration of millions of people from
parts of northwestern Pakistan, erosions of investment climate, nose
diving of production and growing unemployment and above all brought
economic activity to a virtual standstill in many part of the country.
Pakistan had never witnessed such devastating social and economic
upheaval in its industry, even after dismemberment of the country by
direct war.
1. Which are, at present, the main “technical” and "political” difficulties in the
way of making progress towards obtaining international agreement s to
reduce military expenditures?
2. What is the nature and scope of the interrelationship between “technical"
and “political " elements with regard to agreement s to reduce military
expenditures?
3. In which way might agreement s to reduce military expenditures be
related to other disarmament agreements?

12. Economy craving
Chapter04
Energy!
The link between sustainable development and
energy will require even greater efforts for long term
energy security. Crisis management including installation of
rental power plants in the private sector and reduction of
peak demand through energy conservation and load
management measures
The sector which should have been the most
prioritized one, remain neglected for long, the ignorance
harvested country into darkness

13. Chapter 05
Borrowings in fact Burrowing
to Ditch
Although somewhat insulated from the financial crisis,
Pakistan too has witnessed a rise in public debt in the recent past. Fiscal
profligacy in the shape of large subsidies, policy inaction with regards to
rising oil prices in 2007, weak revenue collection, pressure on budgetary
resources placed by a heightened security situation, and efforts to
eliminate the inter corporate debt in the energy sector, have led to
relatively rapid increase in public debt. The cumulative effect of the
depreciation of the Rupee against the US dollar, on the one hand, and the
weakness of the US dollar against third currencies in which a significant
portion of Pakistan’s external public debt is denominated, have also played
a substantial part in the overall increase.
The total public debt stood at Rs.8,894 billion as of June
30, 2010, an increase of Rs. 1,265 billion or 16.6percent higher than the
debt stock at the end of last fiscal year. Government borrowed Rs.798
billion from domestic sources and Rs. 189 billion from external sources to
finance the fiscal operations. Additionally, government borrowed SDR
2,145 million or Rs. 271 billion from IMF for balance of payment support
(that included budget support under the bridge financing facility) and
incurred an exchange loss of Rs. 200 billion on the external debt portfolio
owing to rupee depreciation against US dollar. The Pak Rupee depreciated
by 5 percent during FY2010 compared to 19.2 percent in FY2009.

14. Chapter 06
Original Sin, Tax evasion
The most corrupt departments in Pakistan are the tax
departments. "FBR has the reputation of being corrupt, besides being one
of the most politicized departments of the Government of Pakistan. From
the office of the chairman to middle and lower ranks, appointments are
made in FBR on political and financial considerations. One frequently
comes across people in Islamabad with offers of money for appointments
or postings in departments under the jurisdiction of FBR. The amount that
these people offer, even for a clerical job in customs, income tax or other
subordinate departments give a measure of corruption and graft in FBR. .
. It is thus not mere coincidence that the chairman of FBR has invariably
been the first to go with each change of government since 1988
The level of tax evasion was about Rs.1.5 billion in 1973,
which tremendously increased to Rs.152 billion in 1996. It is also
noteworthy that "the underground economy grew faster than the formal
economy. The underground economy grew annually at the rates of about
27 percent, 14 percent, and 26 percent in 1970s, 1980s, and 1990s
correspondingly while growth rates in the formal economy for the same
sub-periods were about 18 percent, 14 percent, and 17 percent."

15. Chapter 07
Considerations,
in Public sector finance in Pakistan
Recommendation in “National Fiscal Disarrays”
Healthy people healthy country
Human Capital Development
Prioritizing of Education
Suggestions by the chapter “Fiscal Disasters in Pakistan”
Branding Outlook
Stability
Democracy
Legal Enforcement
Expectation
Fiscal Corruption Control Measures
Absence of unified common greater nationalist agenda, like in US
Viability of Economical Succession

16. These are some recommendations in " Defense or
Demise And War against Terror or Economy??”
You can Change your Enemy but not your neighbors”
Reduce Huge defense Expenditure
Save such Opportunity Cost of Such Huge Scale Resource Burning
Rigorous all-round debate, whether This US led war is, war against Terror or
Economy
It Became inevitable as per chapter "Economy craving
Energy!”, that
To improve supply-demand balance through additional least-cost power generation,
bottleneck transmission and distribution systems;
Reduce subsidies and allowing cost recovery tariffs by distribution companies;
Inject cash into the sector to stem asset deterioration; strengthen corporate
governance by
Discharging ownership responsibilities; and
Toughen sector policies and regulations.

17. Strongly recommended in "Borrowings not
burrowing to ditch”, for deficit
financing…
International Trade
Debt re sheduling
Forex Exchange measures
Major recommendation for “Original Sin, Tax evasion”
Levie tax on basis of paying as much as earning
Measures to extend Tax net