Finance Division has acknowledged that the donation and term deposits received from the individuals, firms, companies, institutions and others under Qarz-e-Hasna scheme could not be fully utilised for repayment of the debt.
The government had borrowed Rs 2.8 billion from the public but used only Rs 1.7 billion for the debt retirement, which was instituted in 1997 by then Prime Minister Nawaz Sharif after coming to power to discharge the ever increasing national debt liabilities. The Prime Minister in his address to the nation on 23rd February 1997 had announced the debt retirement programme and soon after that National Debt Retirement Programme (NRDP) was instituted and notified and amounts were accepted from individuals, firms, companies, bodies and institutions in the forms of donations, Qarz-e-Hasna and term deposits.
The minimum deposits in Qarz-e-Hasna and term deposit were Rs 40,000 or more of Rs 10,000. The government exempted contribution under donations and Qarz-e-Hasna from income tax/wealth tax and compulsory deduction of Zakat and no question was raised on the source of the amount donated/deposited in NDRP.
According to Finance Division, minimum period for deposits/contributions as Qarze Hasna (NDRP-II) or term deposit (NDRP-III) was for two years. National Savings Certificates (eg Special Savings Certificates and Defence Savings Certificates) were issued for deposits in terms deposits certificates in local currency. As regards foreign currency contributions under term deposits, the rate of return was different for different currencies as well as higher percentage for longer duration.
The contributions to the funds from domestic and foreign donors/contributors were received in State Bank of Pakistan, Scheduled Banks and Treasury Offices and they were Rs 2.805 billion with Rs 2.032 billion donation, Rs 470.6 million Qarz-e-Hasna and Rs 302.5 million term deposits. The government retired the debt of Rs 1.7 billion from Rs 2.032 billion received under donations. Rs 332.142 million donations, Rs 470.6 million Qarz-e-Hasna and Rs 302 million term deposits were transferred to the consolidated fund.
The balance of "blocked account" ie Rsl.105 billion was partly transferred to the federal consolidated fund, non food account, on 27.03.1999 in terms of Finance Division's letter to facilitate State Bank offices as well as commercial banks to make refund of the Qarze-Hasna and terms deposits on maturity of two years period so that the depositors may not be put to inconvenience. However, it remains unclear whether unutilised amount has been refunded to the depositors or not.