The Upper House of Parliament on Monday passed a resolution that recommended the government to take necessary steps to withdraw high denomination Rs 5,000 notes from circulation to reduce illicit money flow, encourage the use of bank accounts and reduce the size of undocumented economy. The resolution moved by Senator Osman Saifullah Khan of Pakistan Peoples party (PPP) who, according Panama leaks revelations, is holding 38 offshore companies, the highest by any Pakistani citizen, was adopted by the House despite opposition by the government.
Minister for Law and Justice, Zahid Hamid opposed the resolution tooth and nail and remarked that there are a total of Rs 3.431 trillion notes in circulation and taking away Rs 1.020 trillion notes of Rs 5,000 denomination from the public would create a chaos in the market.
"There are Rs 3.431 trillion currency notes in circulation out of which 30 per cent were Rs 5,000 notes and denomination of Rs 5,000 would not only hamper business activities but it would also adversely affect the government's policy of financial inclusion," he said. "I would request the member not to press for the resolution, as he could be impressed by Indian Prime Minister Narendra Modi," he added.
But Senator Osman kept pressing for passage of his resolution despite inquiry from the chair whether he is going to withdraw his resolution or not, saying he wanted his resolution as it is need of the hour. "I want to press for it sir, and I also would like to say that I'll be last person to be impressed of what Modi had been doing," he added. He said that demagnetisation of Rs 5,000 currency notes will help in reducing illicit money flows and encourage people to use the services offered by 14,000 banks across Pakistan.
The resolution stated that the House urges the government to take steps to withdraw from circulation as legal tender the high denomination Rs 5,000 notes so as to reduce illicit money flows, encourage the use of bank accounts and reduce the size of undocumented economy. "This is the only way that will compel people to use banking channels and launch a crackdown on black money circulating in the economy," said Osman.
The PPP senator further stated, "We are not following the Indian model," adding it is State Bank of Pakistan, which had said that people keep the money at home instead of using the banks and this will help overcome the issue. In addition to that, the House unanimously passed another opposition-backed resolution moved by Senator Azam Khan Swati of Pakistan Tehreek-e-Insaf (PTI) that recommended to the government to make necessary amendments in the Constitution to empower the Senate to pass the money bill, including the finance bill.
The lawmakers urged the need for giving financial powers to the Senate, as it is the House of the Federation, adding empowerment of Senate is the empowerment of all federating units as there is equal representation of all the provinces in the Upper House.The law minister opposed the resolution saying that Senate has already been given the recommendatory role on finance bill through the 18th Amendment. He said these powers could be given if Senate elections are held directly.
He said that all recommendations made by the Senate after holding a debate on finance bill for 14 days, were adopted by the National Assembly, which shows the government is not ignoring the Upper House of the Parliament. However, Chairman Senate Raza Rabbani sprang into action over the remarks by the law minister that senators are not directly elected, and said the National Assembly has also sixty women MNAs elected on seats reserved for women, and ten MNAs elected on seats reserved for minorities that make 20 per cent of 342-member National Assembly.
"If these 70 unelected MNAs can vote on the finance bill, why can't the senators?" he questioned. He viewed that they would have to find a middle way to give financial powers to the Senate, saying the senators are elected through provincial assemblies and each province has equal representation in the Senate.
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