Global crude oil prices: Ministry directed to pass on benefit of reduction to people

The National Assembly Standing Committee on Finance has directed the Ministry of Finance and other concerned quarters to pass on the benefit of reduction in global crude oil prices to the people. The Standing Committee on Finance, Revenue and Economic Affairs met here on Wednesday under the chairmanship of Faiz Ullah Kamoka.

The committee meeting was partly held in-camera on the request of the secretary Finance who briefed the panel on matters pertaining to budget strategy paper 2020-2021.

The secretary Finance and Revenue appraised the committee about the draft strategy of the upcoming budget for financial year 2020-2021.

He also briefed the committee regarding the International Monetary Fund (IMF) staff-level agreement made by the Government of Pakistan during the in-camera meeting.

After the in-camera meeting, the chairman committee informed media persons that the government could spend Rs 600 billion on account of the Public Sector Development Programme (PSDP) projects against Rs 700 billion allocated for the ongoing financial year.

He said that the current year's budget deficit was likely to remain 7.5 percent; budgetary allocation for the BISP would be increased in the next budget, and the persistent problem of circular debt would be resolved.

Faiz Ullah Kamoka further said that the State Bank of Pakistan was likely to announce reduction in policy rate next week, adding that the Ministry of Finance had already released Rs 300 million to the Health Ministry to deal with coronavirus situation in the country.

He said that the government was negotiating the issue of cut in tax collection target with the IMF.

According to sources present in the meeting, the secretary Finance, while briefing the participants said that despite political challenges both the federal and the provincial governments would have to enhance the revenue generation resources.

Sources further said that the provincial governments would have to reduce reliance on the federal government on account of financial matters, and the provinces needed to take additional revenue generating measures.

He further said that the matter of funds transfer in connection to Balochistan from the devisable pool should be reconsidered, saying that the present system of financial resources allocation between the federation and the federating units was not sustainable.

According to the sources, the secretary Finance said that as per the present system 70 percent of the financial resources were taken by the provinces as a result the financial accounts of the federal government after debt servicing and defense budget, had no resources to spend on developmental projects, therefore now the provinces had to shoulder additional responsibilities.

The secretary further said that pension-related expenditure of the federal government was going up with each passing day, and certain steps were needed to deal with the matter.

Moreover, the secretary finance also said that the matter of escalating inflation was an administrative, and it should be dealt with by the relevant quarters on an urgent basis.

He further informed the panel that the matter of subsidies and Benazir Income Support Programme must be reviewed; adding that after 15 April, 2020 the Finance Ministry would not release developmental funds.

Sources further stated that the secretary informed the panel that the funds of the Power Holding Limited would be made a part of government debt.

The committee unanimously recommended that the following bills may not be passed by the National Assembly: (i) The Controller General of Accounts (Appointment, Functions and Powers) (Amendment) Bill, 2019" (moved by Sana Ullah Khan Masti Khel, MNA); (ii) To consider "The Islamic Development Bank (Amendment) Bill, 2019" (moved by Amjid Ali Khan, MNA).

The committee deferred the following five government bills with the decision to consider the same in the presence of Hafiz Sheikh, the prime minister's advisor on finance.

(i) To consider "the tax laws (amendment) ordinance, 2019" (government bill) (referred on the 11th November, 2019);

(ii) To consider "the SBP banking services corporation (amendment) bill, 2019" (government bill) (referred on 9th January, 2020);

(iii) To consider "the post office cash certificate (amendment) bill, 2020" (government bill) (referred on 31st January, 2020);

(iv) To consider "the post office national savings certificates (amendment) bill, 2020" (government bill) (referred on 31st January, 2020); and

(v) To consider "the government savings bank (amendment) bill, 2020" (government bill) (referred on 31st January, 2020).

The meeting was attended by MNAs, Faheem Khan, Qaiser Ahmed Sheikh, Ali Perviz, Dr Aisha Ghaus Pasha, Nafisa Shah, Syed Naveed Qamar, Dr Ramesh Kumar Vankwani, besides senior officers from the Ministry of Finance, Revenue and Economic Affairs, and the Federal Board of Revenue (FBR).