[Dr. Pervez Tahir]

The 18th Amendment to the Constitution strengthened the institution of the National Economic Council (NEC) in a number of respects. Before the amendment, it had two clauses. Now the Article 156 related to it has five clauses. The clauses enable Provinces to requisition the NEC meetings, determine the frequency of and quorum for its meetings, and to lay down the requirement to submit an annual report to the National Assembly as well as the Senate. The latter, it should be noted, has equal representation of all the Provinces. According to Clause (5), “The Council shall be responsible to the Majlis-e-Shoora (Parliament) and shall submit an Annual Report to each House of Majlis-e-Shoora (Parliament). Two such reports for the Financial Years 2010-11 and 2011-12 have been submitted. The review presented here relates to the Financial Years 2011-12.


The report is a typical official document, with an average quality of printing. The style and prose leaves much to be desired with proof-reading also needing improvement. The financial year ends in June so ideally, the report should be issued in the following quarter, i.e. latest by the 30th September. For 2010-11, the report was issued in April 2012 instead of September 2011. There has been some improvement, as the present report was issued on the 20th February 2013.

Content analysis

There are 9 Chapters. Chapter 1 reproduces the legal and constitutional provisions. In Chapter 2, the composition of the NEC and ECNEC, the Executive Committee of the National Economic Council is given. Chapter 3 is titled “Performance of the National Economic Council.” Performance is taken to mean the number meetings held. Article 156 (4) requires that “The Council shall meet at least twice a year and the quorum for a meeting of the Council shall be one-half of its total membership.” During the year under report, only one meeting was held. This Chapter also gives the names of the participants. The meeting was the usual pre-budget meeting held in May to review the Annual Plan and the Public Sector Development Programme for the outgoing year and approve the proposed Annual Plan and the Public Sector Programme for the next year. The NEC also considered the routine reports on the schemes approved by the ECNEC and the Central Development Working Party (CDWP) and the Progress Report of the CDWP – all covering the period from 1st April 2011 to 31st March 2012. A special item on the agenda was the Implementation Plan for the Framework for Economic Growth.

In the next four Chapters, these four agenda items are given in details, essentially a reproduction of the summaries submitted to the NEC along with the NEC decisions. Chapter 8 gives the functions of the ECNEC and various development working parties, while the last Chapter outlines the sanctioning procedures of various approving bodies.

The report has three schedules at the end. Schedule A reproduces the Principles of Policy laid down in the Constitution, Schedule B outlines the Rules of Business 1973 relating to the NEC and the ECNEC and Schedule C enumerates important projects approved by the ECNEC.

Is the Constitutional compliance working?

The material reproduced in the report is presented in far more details as part of the presentation of the budget, which happens soon after the NEC meeting. The Parliament is not given any new information. The 18th Amendment changed the Clause (2) of Article 156 as follows:

“The National Economic Council shall review the overall economic condition of the country and shall, for advising the Federal Government and the Provincial Governments, formulate plans in respect of financial, commercial, social and economic policies; and in formulating such plans it shall, amongst other factors, ensure balanced development and regional equity and shall also be guided by the Principles of Policy set out in Chapter 2 of Part-II.”

As before, the Clause (2) specifies the functions of the NEC. It is tasked with making plans for socio-economic development “for advising” the Federal Government and the Provinces. In practice, the NEC has first been directing plans and later the public sector development programmes. The requirement to be guided by the Principles of Policy is intact. In the deliberations of the NEC and in most of the plans, these Principles were rarely discussed. In essence, Article 37 relating to promotion of social justice and Article 38 regarding social and economic well-being of the people cover the requirements of balanced development and regional equity. However, in recognition of the greater role of the provinces, the 18th Amendment specifically adds balanced development and regional equity to the guiding principles for plan formulation by the NEC.

The report does not contain any analysis of the extent to which the Principles of Policy set out in Chapter 2 of Part-II of the Constitution are being followed. Similarly, the specially incorporated provision to ensure balanced development and regional equity merited a separate chapter, but the subject has not been discussed at all.

Suggestions for improvement

Three years have passed since the profound and extensive changes made in the Constitution as a result of the 18th Amendment. It is, however, difficult to say that all of the changes have been implemented in their true letter and spirit. The subject of planning is an important case in point. The annual report of the NEC should focus on the progress made on the implementation of the Principles of Policy. It should present an analytical picture of the impact of planning on balanced development and regional equity. The present secretariat of the NEC does not have the capacity to carry out these analyses. In any case, the subject of planning falls in Federal Legislative List, Part II. Instead of the Rules of Business of the Federal Government, the Rules of CCI apply to the NEC. Planning Commission should be the secretariat of the NEC and charged with the preparation of the report to be presented to the Parliament. The report, to be useful, must be presented within a quarter of the end of the Financial Year.

[Dr. Pervez Tahir is renowned Pakistani Economist and has served as the Chief Economist with the Planning Commission]