ISLAMABAD: The government came under severe criticism during a meeting of the Senate Standing Committee on Finance on Wednesday over rising inflation in the country after some members said it all was happening because of the International Monetary Fund (IMF) programme and its conditionalities.

As the committee meeting started with Senator Talha Mehmood in the chair, Secretary Finance Hamid Yaqoob explained that the government is required to make some adjustments through mini-budget in the original scheme due to Covid-related stimulus package.

Senator Sherry Rehman got infuriated over the explanation and stated that mini-budget was linked to the IMF programme.

“I don’t want briefing on mini-budget, if it is pretended that it is not linked with the IMF,” she said, adding that Pakistan has been in the IMF programme 23 times but this programme has been unbearably painful for the people with persistently increasing inflation.

Finance Secretary Yaqoob said that the proposals have not yet been finalised and work is still being done in consultation with the IMF to make some adjustments in the original scheme of the budget.

He further stated that staff-level agreement has been done; however, details are being worked out.

He said that the SBP law would also be routed through the parliament and asserted that the “IMF programme is not off; we are in the process”.

However, Sherry Rehman said that the process of prior actions was so much prolonged and painful that made people screaming over skyrocketing inflation.

“I have never seen such prolonged process,” she said, asking the ministry to reveal prior conditions, which are yet to be fulfilled.

She said that the government has been trying to hide behind the Covid, which was greater in term of severity and deaths in neighbouring India and Bangladesh but economy, inflation and exchange rate was much better in those countries compared to Pakistan.

The meeting witnessed heated debate between Rehman and the committee chairman on the issue and later on, the chairman complained that the committee, which is a non-partisan forum, was being used for political agenda and would seek senate chairman’s intervention in this regard.

Senator Faisal Saleem Rehman said that the present government has done more debt servicing of the Pakistan People’s Party’s borrowing from the IMF compared to its borrowing from the Fund.

The chairman of the committee expressed concern over widening trade deficit and stated that it was affecting the economy adversely, while asking the government should impose a ban on non-essential imports instead of imposing regulatory duty on them.

He said that there were speculations that the government was trying to impose RD on 525 items and tax and levy on petroleum products would be increased.

Senator Sadia Abbasi opposed the ban and stated that economies work on the basis of policies and not imposing ban on import.

She said that those who are importing vehicles are also paying duties. She, however, stated institutions that ban should be imposed on those government institutions, which are importing BMW and Mercedes for their usage. She said policy should be enforced across all the institutions.

The FBR member policy informed the committee that trade deficit has increased due to value and not because of volume, and stated that petrol import during the first five months of last year was Rs174 billion and this year it was Rs353 billion due to increase in the price of petroleum products in the international market.

The value of crude oil imports increased from Rs175 billion to Rs336 billion.

Natural gas was imported at Rs145 billion to Rs322 billion, diesel at Rs76 billion to Rs180 billion, and coal at Rs63 billion to Rs163 billion.

The committee discussed in details, the refusal by the SECP and the SBP for appointment of any members on the board of directors of the public or private company, if he was facing inquiry or reference of the National Accountability Bureau (NAB).

The SECP and the SBP officials told the committee the rules in this regard have recently been changed and now the word reference and inquiry has been replaced with conviction. They said that now the appointment cannot be denied on the basis of inquiry or reference.

The SECP said that one week ago, the regulations have been changed and now it is the responsibility of the company to consider fitness of anybody being appointed director of any board.

Senator Saleem Mandviwala said that if an inquiry or reference is going on against any person, then the NAB and the SBP would not allow him to be board director of any institution.

He said that former chairman senate senator Farooq Hamid Naek has applied for the credit card and he was asked by the bank to withdraw his application simply because his name was in NAB inquiry.

Senator Sadia Abbasi termed the NAB law as “draconian” and wanted the chairman NAB to be summoned by the committee to explain the “harassment” by its organisation.

Copyright Business Recorder, 2021