Chairman of the National Assembly Standing Committee on Information Technology and Telecommunications, Prime Minister's son-in-law, Captain Safdar (Retd), stated that annual collections under Universal Service Fund (USF) when PML-N came to power were around 60 billion rupees which are around 100 billion rupees today but 'no one knows its whereabouts'. The USF annual collection amount was challenged by Syed Ali Raza Abidi of MQM-Pakistan who claimed USF collection was no more than around 2 billion rupees and Shazia Marri referred to the well-known decision by the Minister of Finance Ishaq Dar to use USF for budget support. The relevant ministry officials remained silent on the subject no doubt in deference to their concerns that any acknowledgement on their part that the dedicated fund is being illegally used for general budget support may anger the powerful Finance Minister. The committee has sought details of its collection and utilisation in the next meeting.
USF was established under the Pakistan Telecom Act 1996/2000 and collected from licensed telecommunication operators. Its objective was to spread the benefits associated with the telecom revolution to un-served and underserved areas of the country. And even though USF has an independent board of directors comprising an equal number of members from the private and the public sector, it is the federal government that has possession, management and control of the Fund, its income, undertakings, properties and assets and is liable to make quarterly releases as per its approved budget.
To date, the USF has been used for several noteworthy projects, including: (i) rural telecom services project in seven areas with the objective of focusing on rural areas; (ii) broadband for un-served urban areas designed to give a boost to e-services like e-health, e-government, e-commerce; and (iii) providing ICT-related equipment to Al-Shifa Trust Eye Hospital and Pakistan Foundation Fighting Blindness with the objective of helping people with disabilities, overcome their disability and assist them to compete on even basis with their non-disabled peers by using telecom and e-services. Such salutary programmes that were designed to benefit the vulnerable in both rural and urban areas sadly have been abandoned in favour of the use of USF for budget support by the incumbent Finance Minister.
One would suppose the Finance Minister may justify the use of this dedicated fund for budget support by pointing out that his government inherited an unsustainable deficit, with the bulk of the budgeted expenditure on current as opposed to growth spurring development expenditure, and that any funding that narrowed the deficit took priority over bringing the benefits of any dedicated fund to specific sectors. However, it has now been four years into the five-year tenure of the Sharif administration and one would have hoped that the macroeconomic indicators had stabilised significantly to allow the Finance Ministry not to appropriate dedicated funds any longer. That it has not done so is being sourced to flawed economic policies that include: (i) anti-development policy, reference to the ever-rising reliance on provincial surpluses to meet the federal budget deficit which inhibits provinces from investing appropriate amounts in the devolved social sectors as well as on developing infrastructure that is within their purview, including farm to market roads; and (ii) raising borrowing (domestic and external) to unsustainable levels and artificially keeping outflows within the range of sustainability by an overvalued rupee and a manipulated high growth rate. To conclude, the Ishaq Dar-led Finance Ministry must henceforth desist from usurping dedicated funds for example USF as well as the Export Development Fund attributed to an inability to keep the deficit within sustainable levels.