Elections to Punjab, KP assemblies: SC asks SBP to release Rs21bn

ISLAMABAD: The Supreme Court on Friday directed the State Bank of Pakistan (SBP) to allocate Rs21 billion for holding general elections to Punjab and the Khyber Pakhtunkhwa assemblies by Monday (April 17).

The court ordered the State Bank and the Finance Ministry/ Division to file the compliance reports on 18-04-23, while the Finance Ministry’s report shall also include a confirmation in relation to AGPR.

The Election Commission of Pakistan was asked to file report on 18.04.2023 confirming that Rs21 billion have become available to it.

Funds for elections: Notices issued to top MoF official, SBP chief, AGP

A three-judge bench, headed by Chief Justice Umar Ata Bandial and comprising Justice Ijazul Ahsan and Justice Munib Akhtar, in the chambers heard the implementation of its April 4 order regarding the provision of funds to the Election Commission of Pakistan (ECP) that lasted for more than an hour.

Besides Attorney General for Pakistan Usman Mansoor Awan, Special Secretary Finance Owais Manzoor Samra, Additional Secretary Finance Amar Mehmood and Additional Secretary Finance Tanveer Butt, SBP officials including Acting Governor Seema Kamil, Deputy Governor Inayat Hussain Chaudhry, Director Qadir Baksh and Protocol Officer Mohsin Afzal and the ECP DG-Law appeared before the bench in the chambers.

The Court order said; “The State Bank of Pakistan shall from Account I lying under its control and management (and which constitutes the principal component of the Federal Consolidated Fund) forthwith allocate and release Rs21 Billion for purposes of the general elections to the Punjab and KP Assemblies.

The State Bank shall in this regard immediately send an appropriate communication to the Finance Ministry/ Division. The said Ministry/ Division shall forthwith and immediately issue a proper direction to the AGPR to increase the limit of the ceiling with respect to the Election Commission’s ID No.2826 by the said sum of Rs21 billion.

This position shall also immediately be confirmed to the Election Commission by the said Ministry/ Division which shall also ensure that AGPR also forthwith gives proper intimation and confirmation to the Election Commission. All this must be done at the earliest and at the absolute latest not later than the close of business on Monday, i.e., 17.04.2023.

The order said that the sum of Rs21 billion shall be and become available to and with the Election Commission in immediately releasable and utilizable funds for the purposes of holding the general elections to the Punjab and KP Assemblies. All the entities, i.e., the State Bank, Finance Ministry/ Division, AGPR and the Election Commission must act together and coordinate fully so that the order and direction of the Court is implemented within the stipulated timeframe.

The Court noted that this order shall be deemed sufficient authority for all purposes for the authorization of expenditure on the Federal Consolidated Fund and the Federal Government shall thereupon obtain the ex-post facto approval and sanction from the National Assembly for authorisation of this expenditure in terms of Article 84 and other applicable provisions of the Constitution.

In compliance the court direction, the Acting Governor, State Bank of Pakistan presented a statement setting out the funds and monies of the Federation/ Federal Government which are under the custody, control and management of the State Bank.

The Acting Governor explained about the amounts constituted the Federal Consolidated Fund. The amount lying in Account No I (Non-Food) (“Account I”) constitutes by far the largest component of the Fund (being 98.77% thereof as of the date for which the data was provided). It was further explained that the amount lying in Account I is not designated for any particular or special usage whatsoever.

Furthermore, the funds therein are not static inasmuch as there are regular (it seems almost daily) inflows into, and outflows there from, as Government receipts flow in, and monies are released to meet Government expenditures. The Acting Governor stated that other than Account I, the other 16 accounts were for special and designated purposes, carrying different amounts as set out in the table above.

It was explained to the Acting Governor that as per para 5 of the order dated 04.04.2023 made in a sum of Rs.21 Billion was required for the purposes of general elections to the Punjab and Khyber Pakhtunkhwa Assemblies and it was queried as to whether this sum could be made available from the funds aforementioned of the Federal Government lying with and under the custody, control and management of the State Bank, with particular reference to Account I.

The Acting Governor confirmed that this would be done if the Court so directed and ordered. The State Bank further confirmed that the necessary transaction for the transfer of funds to the Commission, so that Rs.21 Billion become immediately available and utilizable for the latter, could be done within the shortest possible time, and at the latest by the close of business on Monday, i.e., 17.04.2023.

It was confirmed by the officials of the Finance Ministry that in terms of Article 84 of the Constitution, the Federal Government was fully authorized to make expenditures from the Federal Consolidated Fund for, inter alia, “expenditure upon some new service not included in the Annual Budget Statement” for the relevant financial year here being the year ending on 30.06.2023.

For such expenditure the Federal Government obtains ex post facto approval and authorization from the National Assembly in terms of the procedure laid down in the Articles of the Constitution immediately preceding Article 84.

On a consideration of all of the foregoing it is our view that there is absolutely no difficulty or hitch, either financially or procedurally or in terms of the relevant authorization by and under the Constitution, for the immediate release of Rs21 Billion to the Election Commission for fulfilling its constitutional mandate for the holding of general elections to the Punjab and KP Assemblies.

The Secretary, with the assistance of the Attorney General, briefed the bench about the financial position of the federal government, with particular reference also to the present and/ or pending international obligations to the IMF.

From the figures presented to the Court, of which even the smallest ran to several hundreds of Billions of Rupees, it became clear that the disbursement of Rs.21 Billion for fulfilling the constitutional mandate of holding the general elections would, at most, amount to a minuscule increase in the obligations of the Federal Government. Indeed, viewed from certain financial perspectives and contexts, which were stated by the team from Finance, the amount would be so insignificant as to not even amount to a rounding off error.

The team from Finance also informed the Court that the Federal Government regularly went into the bond markets to borrow and raise funds which in the aggregate in any given financial year ran into trillions of Rupees.

It was stated that in this regard Treasury bills were issued by the State Bank on behalf of the Federal Government on a regular and ongoing basis and that, even in this perspective, taking the amount now under consideration into account would not have any meaningful impact or effect.

It was also confirmed by Finance that if the Court so ordered and directed the process of making the funds to the tune of Rs. 21 Billion available to the Commission on an immediately utilizable basis would be concluded rapidly, and by the close of business on 17.04.2023.

In our view, on an assessment of the presentations made by the State Bank and the Finance Ministry/ Division, there can be no doubt that the Rs21 Billion required by the Commission and ordered to be made available in terms of para 5 of the Order can be done immediately and within a matter of a day.

Copyright Business Recorder, 2023