ISLAMABAD: A ‘flimsy’ justification was cited by the Chief Secretary Punjab and the Ministry of Finance to the Election Commission of Pakistan (ECP) prompting it to issue an order on 22 March to postpone elections in the province till 8 October.
This was the consensus opinion of former finance minister Punjab Mohsin Leghari and former Finance Minister and more recently Advisor to Chief Minister Punjab on Economic Affairs Division and Planning Dr Salman Shah (May 15 2019 till 12 January 2023).
While talking to Business Recorder Mohsin Leghari stated that the provincial government was on track in terms of revenue and expenditure during the first six months of the current fiscal year and this was evident from the consolidated federal and provincial fiscal operation report July-December 2022-23. He added that the provincial budget was surplus by Rs 38 billion in the first six months of the year.
Leghari acknowledged that a significant slowdown in economic activities would have had a negative impact on provincial revenue generated from excise and taxation offices particularly on account of registration of motor vehicles and motorcycles whose sales have declined significantly during the last few months and stamp duty from sales/ purchase of immovable properties as well as other sources of revenue for the province. Leghari categorically stated that sales tax on services was on target and province would achieve the target.
The former finance minister Punjab admitted that in the event that FBR fails to achieve the target of Rs7.640 trillion for the current fiscal year, Punjab’s share will decrease from the divisible pool under the NFC Award.
The FBR has provisionally collected Rs 4,493 billion in the first eight months of the current fiscal year against the assigned target of Rs4,733 billion for July-February (2022-23), reflecting a shortfall of Rs240 billion. If this trend persists in the remaining months of the ongoing fiscal year, the projections for the divisible pool will not be met.
The Chief Secretary’s justification as provided to the ECP is as follows: it shall not be possible for the provincial government to fund the elections…the provincial government is expecting shortfall of its Rs 137 billion in the receipts of Punjab on account of federal divisible pool share.
There is also expected shortfall of its Rs111.5 billion in the provincial own source revenue, 140.06 billion as arrears yet to be received from federal government as pending liabilities. The overall debt stock (foreign and domestic) of the province amounts to Rs. 1.328 trillion.
The debt servicing amount has been raised to Rs. 128 billion against earlier estimation of Rs 103 billion due to volatility in forex rates. The commodity debt of the province is expected to cross Rs. 1 trillion at the end of wheat procurement drive.
Under IMF Program, Punjab also has to maintain cash surplus of Rs. 413.9 billion led to decision by the ECP to postpone the polls in the province.
While talking to Business Recorder Dr Shah said that the refusal to allocate funds reflects the government’s intent not to hold elections which is why it was resorting to unsubstantial pretexts to postpone the polls.
The ECP in its order notes that the Ministry of Finance “has shown an inability to release funds due to financial crunch and unprecedented economic crises in the country.”
Copyright Business Recorder, 2023