ISLAMABAD: Ministry of Finance (MoF) has reportedly asked NHA, Power Division, NTDC, Aviation Division and Strategic Planning Division (SPD) to clear outstanding liabilities of over Rs 1 trillion, well informed sources told Business Recorder.
The MoF conveyed this message to the defaulting public sector entities in a meeting presided over by the additional secretary Finance (Budget).
The finance secretary was supposed to chair the meeting, but due to the attendance of junior officers from the ministries / departments, the AFS (Budget) chaired the meeting.
Joint secretary (budget-III) made a detailed presentation to the participants highlighting the importance of markup being one of the important sources of federal non-tax revenues especially in the context of mid-year accounting result, 6 major entities i.e. NHA, Power Division, NTDC, Aviation Division, SPD owe 82 percent of the total outstanding amount of principal and mark-up.
Total outstanding as on June 30, 2020 was Rs 1.093 trillion (principal Rs 353 billion and mark-up 740 billion) on account of Cash Development Loans (CDL) and foreign relent loans, and budget estimates for the CFY are at Rs 284 billion (principal Rs 109 billion and mark-up 175 billion) against which only Rs 17.5 billion has been received up to Nov 30, 2020.
According to sources, representative of NHA stated that a summary has been moved to the Economic Coordination Committee (ECC) for conversion of outstanding loans to government grant/waiver.
ECC desired a business plan be presented in a month which is under process.
Representative of Aviation Division stated that due to poor financial condition of PIA, the repayment is not possible without government support. Power Division, NTDC and Chashma Nuclear Power Plant (CNPP) raised the issue of receivables from CPPA-G which is linked to circular debt.
They requested that an amicable solution to this issue may be reached. JS (Budget-III) informed the meeting that the referred Public Entities are required to pay the outstanding amounts in terms of the relevant provisions of PFM Act, 2019 which provides that mark-up on loans will be paid according to amortization schedule as first charge on their gross revenues. Further, a late payment surcharge will be levied with effect from July 01, 2020 which has already been conveyed on Nov 2, 2020.
The meeting also decided that Finance Division, in consultation with the concerned division may refer defaulter's case to FBR/ Commissioner (Inland Revenue) for recovery of non-tax revenue as arrear of income tax in accordance with the provisions of the Income Tax Ordinance, 2001(XLIX of 2001).
"Finance Ministry has clearly conveyed and advised all the participants that the outstanding liabilities may be cleared in compliance with the provisions of PFM Act 2019 (Amended)," the sources added.
Copyright Business Recorder, 2021
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