The Public Accounts Committee (PAC) was informed on Wednesday by the secretary finance that the country's fiscal deficit of outgoing financial year 2017-18 remains 5.8 percent. Briefing the PAC meeting, which held here under the chairmanship of Syed Khursheed Ahmad Shah, Secretary Finance Arif Hameed Khan also said that only 75 percent developmental budget is expected to be utilized during the ongoing financial year.
He said that the government earmarked over Rs 1 trillion for the Public Sector Development Program (PSDP) but during the year only Rs750 billion are likely to be utilized under the PSDP.
The PAC discussed and reviewed audit paras of the Ministry of Finance and Revenue of the year 2015-16. The officials of the Auditor General of Pakistan (AGP) while briefing the panel said that the government in 2015-16 spent Rs 162 billion which were not mentioned in the PSD.
The PAC expressed serious anger over the out of PSDP expenditures of Rs 162 billion. Briefing the parliamentary body Joint Secretary (JS), Ministry of Finance, Zahoor Ahmad said if the Pakistan People Party had been ruling during the abovementioned period, it would also have spent the amount.
The PAC chairman snubbed the JS, saying, "You have no knowledge of the finance and have started delivering a lecture to the PAC members. The committee will forward a complain against you to the relevant quarters."
On this Secretary Finance Arif Hameed Khan intervened and said that the amount was spent on Benazir Income Support Program (BISP) with the approval of the Economic Coordination Committee of the Cabinet, which also included Pakistan-funded projects in Afghanistan. He added that poverty alleviation program and provision of loans to small farmers were also included in the above expenditures.
The PAC also urged the Chief Justice of Pakistan (CJP) Mian Saqib Nisar to take suo motu notice of selling of KASB bank at Rs 1,000 only.
The committee chairman lashed out at finance secretary and deputy governor State Bank and said that no one even knows anything about the development budget and who sold the KASB bank for Rs 1000.
"The National Accountability Bureau (NAB) would have initiated investigation if a politician was involved," the chairman added.
The committee also directed to forward written complaint to Establishment Division against the joint secretary of Ministry of Finance.
The audit officials told that Bank Islami was granted loan of Rs 15 billion on low mark-up of 4.7 percent instead of 7 percent mark-up which caused Rs 430 million loss to the national kitty. The officials said that after the grant of Rs 15 billion loans to the bank, an additional amount of Rs 5 billion at 0.1 percent markup rate was also awarded to the bank.
On the questions of the PAC Chairman Khursheed Shah, the officials informed the panel that one Ali Hussain was the main shareholder in the purchase of the bank while other Pakistani nationals along with some Bahrain investors were also part of the group who purchased the bank. The PAC was informed that the case was already in the court; therefore, the committee delayed the discussion on the audit objection till the court decision.
Member Committee Syed Naveed Qamar said that there are a number of loss-making public sector entities in the country including Pakistan International Airlines, Pakistan Steels Mill, Pakistan Railways and other but it doesn't mean the government will hand over all these entities to private parties without any price.
Member Committee Shireen Rehman alleged that all this was arranged by the former Minister Finance Ishaq Dar, adding now it is the collective responsibility of everybody concerned to stop such happenings in future.
The deputy governor State Bank briefing the panel said that four parties applied for the purchase of the bank but the Bank Islami offered highest bid, therefore it was sold to the winning party. He also clarified that the bank was not given fund but owing to serious liquidity issues the SBP being a regulator provided loans to the bank as per set rules and regulations. He added that in the past, the SBP has also provided loans to the banks facing liquidity issues on soft terms and conditions. The officials said that the bank's assets as compared with liabilities were lower; therefore, it was sold at Rs 1,000 only.
The panel also expressed serious concerns over the long delay in court cases on Rs 26 billion fines imposed by the Competition Commission of Pakistan against various companies during 2008-15 but the authorities could not recover a single penny due to court cases. The AGP officials said that four sectors have to pay billions of rupees to the government on account of violations of the set rules and regulations of Commission. They said that telecom sector has to pay a penalty of Rs9 billion, cement sector, Rs6 billion, fertilizer, banking and oil and gas sectors, Rs 470 million, and healthcare sector, Rs 450 millions, but as yet no recovery has been made as cases are pending in Lahore High Court and Sindh High Court.
The panel directed the secretary finance to raise the issue with attorney general of Pakistan as the amount does not belong to any individual but the state; therefore these cases must be decided on urgent basis as already nine years have been past.