ISLAMABAD: The government is drafting a new Bill to amend the laws of State Bank of Pakistan (SBP) aimed at strengthening its autonomy, governance and mandate, as the first draft has been scrapped after serious differences between the Finance Ministry and the central bank.
"Draft Bill considered by Cabinet Committee on Disposal of Legislative Cases (CCLC) on April 3, 2020 and deferred due to differences in Ministry of Finance and State Bank. Revised Bill is under consideration," said, Prime Minister's Advisor on Institutional Reforms and Austerity, Dr. Ishrat Hussain at a recent meeting of Federal Cabinet.
In the first draft, Finance Ministry had proposed removing the SBP Governor from the Chairmanship of the SBP Board of Directors. However this was rigorously resisted by the Governor SBP, after which those were not cleared.
Dr. Ishrat Hussain, in his presentation about restructuring and strengthening of key institutions, stated that the Finance Bill 2020 has been passed by the National Assembly to restructure Federal Board of Revenue(FBR), which will lead to enhanced scope of advance ruling, revitalizing alternative dispute resolution mechanism, authorized economic operator scheme, and real-time access to information of data bases.
The World Bank has approved the programme for Pakistan meant to raise revenue. The First meeting of steering committee was held on July 6, 2020 to determine a mechanism to simplify tax collection, reduce the withholding regime and increase automation. Interviews conducted on June 29, to hire Chief Information Officer and CEO for PRAL, led to selections.
Tariff determination entrusted to National Tariff Commission (NTC) which has undertaken tariff rationalization on more than 1600 raw materials has been reduced to zero. For automation reforms, ICT based survey for sales tax registration was launched on July 1, 2020, followed by online complaint management system on July 6, 2020. Pre-populated returns, online tax payer ledger and other major IT based automations in process and are to be completed by December 2020.
A Bill has been submitted in the National Assembly for establishment of single window company and integrated transit trade management system. Human Resource reforms in FBR are also underway. Specialists are being hired on contracts and new rotation policy is formulated which will be completed by December 2020.
An eight-member Board will be constituted and financial autonomy will be given to FBR with functional separation at headquarters and in the field offices. Tax Policy Board of the FBR would be separated.
Securities and Exchange Commission of Pakistan (SECP)- A task has been acomplished by revamping of Policy Board so as to be comprising of eminent members and would be chaired by the private sector experts rather than Secretary Finance. The first phase of end -to-end automation of processes will be completed by December 2020 as contract has been awarded. The entire automation will be completed by December 2020.
Auditor General of Pakistan- a report has been prepared for revitalizing and modernizing the organization, business processes, human resource, audit methodology of the AGP to make it effective and professional. For this purpose draft AGP Act is under review in the Finance Division.
Accounting functions are being devolved to the Divisions, and pre-audit functions would be devolved to four Ministries. Competition Commission of Pakistan (CCP)- the organization is constrained by a fundamental legal issue. The removal of this impediment would improve the functioning of the Commission for promoting market competition and enforcing action against cartels. He added that appointments in Competition Appellate Tribunals is under process in the Law Ministry.
Ease of Doing Business- A committee headed by Prime Minister Advisor on Commerce and Investment is working on modernization and digitization of all licences and elimination of unnecessary permits in assistance with World Bank, Chambers, Provincial Governments and other stakeholders. Changes in Local Government rules is also on the cards to encourage industrialization. The extensive reforms agenda will be completed by end 2022.
Restructuring of Pakistan Railways- The Ministry has prepared a detailed restructuring plan approved by the Prime Minister, according to which four new companies would be established: (i) Railway Holding Company;(ii) Freight Traffic Management Company; (iii) Passenger Traffic Management Company and; (iv) Infrastructure Management Company. This task will be completed in four months. A new ML-1 authority will also be established. Selection process for new CEO will be initiated and completed in two months. Railway Board will be revitalized with induction of new members from the private sector. Four MP posts would be created for technical experts for which selection is under process. 15 passenger and two freight trains are being outsourced. Complete ERP software is being deployed and PPP projects are being launched for land and stations.
Restructuring of PIA- financial restructuring of balance sheet is in progress under the supervision of a committee headed by Secretary Finance. Strategic Business Plan is also under preparation which will be submitted to the ECC next month. Human Resource rationalization- offering of VSS to employees is also expected next month. Non-core functions will be separated by December 2020.
Complete bifurcation of Civil Aviation Authority into two distinct entities with the objective of separating the regulatory and airports management functions. Clubbing of different categories of airports into separate subsidiaries for better management and possibly to attract foreign investments.
324 out of 441 Organizational Entities (OEs) to be retained by the federal government. 88 Executive Departments notified, 204 autonomous bodies notified, 10 entities notified for transfer to provinces and relevant Division, 9 entities notified to be wound up or liquidated, 17 mergers notified and 43 entities to be privatized or transferred to Sarmaya-e-Pakistan. Cabinet Committee on Institutional Reforms formed to steer the reforms process will submit its fourth report to the Cabinet shortly.
Rightsizing of Governance Apparatus: abolishment of vacant staff seats - Implementation committee recommended in its 34th meeting held on May 7, 2020 to abolish all posts of BPS-1-16 in the Ministries/Divisions and executive departments which are lying vacant for more than one year. Objectives of the initiative are rightsizing the governance apparatus and promotion of austerity. Establishment Division is in the process of preparing summary for soliciting approval of federal cabinet for the proposal.
New MP scales policy has been notified to attract talent from private sector for senior leadership positions in the federal government. A committee has been formed to revise and upgrade MP and SPP scale posts. The committee has been meeting regularly to consider requests of the Ministries and has approved conversion of 9 seats.
Copyright Business Recorder, 2020