During the briefing to the Standing Committee of National Assembly on Finance presided over by Asad Umar on Wednesday, when he was asked about possibility of any mini-budget in October 2019 due to current trend in revenue shortfall, he replied that no mini-budget is expected in October 2019.
The FBR Member said that all tax policy and administrative measures are being implemented with the help of technology to increase tax collection.
The government came under severe criticism on increase in prices of commodities as members from both sides regretted absence of any policy to deal with the challenge on economic slowdown, inflation and increase in unemployment.
The committee also expressed serious concerns over slippages of over Rs 700 billion in budget estimates, leading to 8.9 percent fiscal deficit. The Federal Board of Revenue (FBR) said that tax collection for the current fiscal year would remain between Rs 5 to Rs 5.5 trillion depending on a number of factors; however, the revenue collection target for the current fiscal year is challenging but doable.
The committee directed the Finance Ministry to give one-page evaluation on "how could the budgetary estimates be so wrong within 20 days" as budgetary estimates were prepared with upward revised budget deficit at 7.2 percent on June 11, 2019. However, on June 30, data released by the ministry showed that budget deficit was 8.9 percent and these very wrong budgetary estimates were mind-boggling for every one, said the chairman of the committee.
The committee also expressed dissatisfaction over briefing from the Finance and Statistics Divisions with members one after another did not receive reply to their question about the government's steps to tackle inflation.
The secretary finance conceded that response of the Finance Ministry was not adequate and said, "Please give us time to come up with adequate response and full preparedness."
Naveed Qamar, former finance minister, Dr Ayesha Ghuas Pash, former finance minister Punjab, and former chairman of the finance committee Faiz Uullah kept on inquiring about the steps taken by the government to tacjle price hike and inflation, but could not get response other than routine briefing that Sasta Bazaars were established to provide relief to the people. There was no decrease in the prices of bread (Chapati) although the government provided Rs 1.5 billion subsidy on gas to roadside tandoors (kilns).
"Where is governor State Bank of Pakistan (SBP) and what is he doing to tackle inflation as increase in discount rate has impacted the industry but has no impact in curbing inflation," said Naveed Qamar. Ayesha Ghaus Pasha commented, "Governor SBP must have known that this is cost-push and not demand-pull inflation."
The officials of Finance Ministry and Statistic Division said that they expect the inflation in the first half of the current fiscal year would go up but it would decrease in the second half of the fiscal year.
The Ministry of Finance briefed the committee on Consumer Price Index (CPI) and Sensitive Price Index (SPI) and stated prices trend in market for different commodities have decreased during the last two weeks.
The committee decided to form a three-member sub-committee to be headed by Dr Ayesha Ghous Pasha and with Hina Rabbani Khar and Ramesh Kumar Vankwani as its members. The sub-committee would get briefing from SBP, finance and other ministries and recommend the measures for controlling inflation.
The committee was also briefed on the fiscal situation of the country that led to accumulation of debt and fiscal deficit in current year 2018-19 and plans for 2019-20. The secretary finance stated that FBR revenue decreased by Rs 321 billion, Rs 276 billion decreased in other revenues in 2018-19 while increase of Rs 286 billion in expenditures led to higher budget deficit. He said that there was an increase of Rs 224 billion in current expenditures and total deficit was Rs 686 billion during the last financial year, which was approximately 1.8 percent decrease in the GDP.
He also informed the committee about the details of domestic and external debts up to 30th June, 2019. The committee recommended that Ministry of Finance will furnish the details of external and domestic debt for the last ten years to the committee for onward circulation among the members.
Representative from Ministry of Finance informed the committee that domestic Sukuk bonds can be issued by the government in near future and international Sukuk bonds will also be issued this year. The committee recommended that Ministry of Finance will brief the committee on debt management and about its planning for next five years in the month of October 2019.
The committee discussed the issue of GIDC in detail, expressed its concern and decided that committee members will rephrase their questions/suggestions in this regard and the same would be forwarded to concerned quarter for their response. The members of the committee wanted that board of directors of the companies that could have benefited from GIDC waiver must be revealed.
The Member (IR-Operation), Federal Board of Revenue (FBR) briefed the committee about the measures adopted by the FBR for collection of revenue. She said that the target for the month of July 2019 was fixed at Rs 291.5 billion while during July 2019, FBR collected Rs 281.7 billion, which was Rs 255.6 billion in July 2018, entailing a growth of 10.2 percent. She further informed that collection in the month of August 2019 was Rs 297.7 billion against the target fixed at Rs 352.1 billion. The committee members expressed their apprehensions on the overall growth in the country and targets set by the FBR for collection of revenue. The committee decided that FBR will brief the committee in the month of October 2019 with regard to the achievements of revenue targets.
The committee unanimously rendered its consent for holding the meeting of the committee In September 2019 with Jihad Azour, Director Middle East and Central Asia Department (MCD), IMF, Ernesto Ramirez Rigo, Mission Chief for Pakistan, and Teresa Daban Sanchez, IMF's Resident Representative for Pakistan. -ZAHEER ABBASI