NA session adjourned after govt tables SBP amendment bill, 'mini-budget' amid ruckus

The National Assembly (NA) session was adjourned till Friday (tomorrow) after the Finance (Supplementary) Bill, 2021 and State Bank of Pakistan (Amendment) Bill 2021 were introduced in the NA.

As the session commenced earlier, Finance Minister Shaukat Tarin moved the Finance (Supplementary) Bill, 2021 (mini-budget) as well as the State Bank of Pakistan (SBP) Amendment Bill 2021 in the assembly.

The two bills, for long seen as thaws in revival of the International Monetary Fund (IMF) programme, have invited severe criticism from the opposition. As the finance minister presented the bill, opposition members chanted slogans and gathered before the chair. They also protested as the treasury bench presented several ordinances for approval. Physical altercations between various members was also witnessed.

The Pakistan government is desperately seeking the green-light from the IMF in reviving the stalled $6-billion Extended Fund Facility (EFF). The IMF board is due to meet on January 12, and many see the NA session as a key element ahead of the meeting. Experts say the government is keen to show progress on the amended Finance and SBP bills.

During the session, NA Speaker Asad Qaisar said the amended finance bill will not be forwarded to the standing committee concerned. The SBP bill has been referred to the relevant standing committee for necessary vetting.

Meanwhile, the House adopted different resolutions extending various Ordinances for a period of 120 days. These Ordinances include; “the Federal Government Properties Management Authority Ordinance, 2021”, “the Elections (Third Amendment) Ordinance, 2021”, “the Public Properties (Removal of Encroachment) Ordinance, 2021”, “the Pakistan Council of Research in Water Resources (Amendment) Ordinance, 2021”, “the Pakistan Food Security Flow and Information Ordinance, 2021” and “the Tax Laws (Third Amendment) Ordinance, 2021”.

Addressing the floor of the assembly, Pakistan Muslim League-Nawaz (PML-N) leader Khawaja Asif said that the whole nation was ashamed of what was happening in the parliament. He continued that the country's economic sovereignty was being traded, adding that the control of the State Bank of Pakistan (SBP) is being handed over to the IMF.

He further said that the government was withdrawing tax exemption on several essential items, which would increase inflationary pressure on the economy.

If mini-budget approved, 2022 will be the worst year of inflation: Shehbaz Sharif

Pakistan Peoples Party Raja Pervez Ashraf also addressed the assembly saying that the way the ordinances were being approved through simple resolutions had dented the reputation of Parliament. He further said that inflation, shortage of gas and other commodities have already ruined the lives of the people, adding that if a mini-budget is passed, then their difficulties would be increased.

Information and Broadcasting Minister Fawad Chaudhry had earlier stated that a parliamentary meeting of the Pakistan Tehreek-e-Insaf (PTI) and its allies would be held after which the bill is tabled in the assembly.

The development comes after the cabinet had postponed the approval of the highly inflationary Rs360-billion mini-budget amid strong criticism against the Ministry of Finance due to increasing inflation.

Fawad, in a post-cabinet meeting, had said that the cabinet deferred approval of the supplementary finance bill as it wants a "threadbare discussion on it before presenting it to the parliament for passage” .

Lack of consultations with allies leads to delay

The government has committed to the IMF that Pakistan will complete all ‘prior actions’ before the board of directors' meeting to approve the revival of $6-billion EFF. The IMF board meeting is due to be held on January 12.

Under those prior actions, the government, through the supplementary finance bill, will cause a net fiscal adjustment of almost Rs550 billion during the remaining part of the current fiscal year through a 22 per cent cut in development funds, about Rs360 billion worth of withdrawal of tax exemptions with a revised tax target of Rs6.1 trillion and increase in petroleum levy on major petroleum products by Rs4 per litre per month.