ECC approves Rs17.5 billion supplementary budget

Also freezes, in principle, payments worth Rs96b that PIA owes to CAA

Our Correspondent March 21, 2019
Finance Minister Asad Umar. PHOTO:AFP

ISLAMABAD: The government on Wednesday approved Rs17.5 billion supplementary budget for largely meeting expenditures of legislators and temporarily displaced persons including Rs400 million for maintaining an aircraft being used by Prime Minister Imran Khan.

The Economic Coordination Committee (ECC) of the Cabinet also approved higher hydel profit for Azad Jammu and Kashmir (AJK) government that will provide Rs10 billion additional income to the region. But it will result into 11 paisa increase in the electricity prices. The ECC also approved, in principle, to freeze Rs96 billion payments that the cash-starved Pakistan International Airlines (PIA) owed to Civil Aviation Authority (CAA).

The ECC approved $2.9 million or Rs404 million in technical supplementary grant for the Ministry of Defence “for logistic support for the maintenance of Cessna aircraft”. The plane is in use of the prime minister.

These are not extraordinary expenditure rather its annual maintenance cost of the aircraft, said Finance Minister Asad Umar. He also said that the ECC approved in principle to freeze the outstanding dues of PIA payable to CAA alongside late payment penalty.

The minister said that the ECC directed both the PIA and the CAA to sit together and work out a future plan to address the issue. The PIA is required to submit its strategic plan by end of this month that will be aimed at reviving the sick airline. The finance minister said that the CAA has also been asked to share its cash flow projection for the medium-term.

An official of the finance ministry said that Rs96 billion payments have been frozen till 30 June of this year. The decision to freeze these payments had been taken at the level of Prime Minister Imran.

The ECC approved to increase water usage charges for the AJK government from 15 paisa per unit to Rs1.10, according to a handout issued by the finance ministry. It added that ECC noted that the proposed arrangement, where AJK would set up its own distribution company and would receive Water Usage Charges at the enhanced rate of Rs1.10/kwh was based on the principle of equality and endorsed the same.

A committee had recommended increasing the AJK water usage charges aimed at bringing it at par with net hydel profit paid to Punjab and Khyber-Pakhtunkhwa governments.

Supplementary budget

The ECC approved Rs17.5 billion in supplementary grants for various government organisations - a move that shows the government lacks the fiscal discipline. It has become a practice to issue the supplementary budgets in almost every meeting of the ECC. In February, the cabinet had authorised the ECC to vet these grants before these are presented for its approval.

“The ECC approved the demand of Cabinet Division to release technical supplementary grant of Rs14,844,256 million,” according to the finance ministry’s press release.

This comes to Rs14.84 billion, which has given to the Cabinet Division under the demand number 2. The demand number 2 relates to other expenditures of the Cabinet Division. These other expenditures are largely on executive and legislative organs and financial and fiscal affairs. The original grant under this head was Rs6.3 billion but the supplementary budget, as per finance ministry press release, is more than double of the original budget.

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The ECC also approved supplementary grant amounting to Rs1.8 billion for Temporarily Dislocated Persons from North Waziristan in the wake of Operation Zarb-e-Azb. In order to meet the expenses of Capital Administration and Development Division (CADD), the committee approved technical supplementary grant of Rs202.637 million for CADD and Rs12.409 million for Pakistan Chairs Abroad. Similarly, it approved supplementary grant of Rs156.327 million for Ministry of Health Services, Regulation and Coordination and Rs41.671 million for Ministry of Overseas Pakistanis and Human Resource Development

The ECC was briefed by the Ministry of Science and Technology on the status of operationalisation of Pakistan Hilal Authority. The committee directed that Prime Minister’s Adviser on Institutional Reforms and Austerity Dr Ishrat Hussain should review the matter of placement of the authority under the most relevant ministry.

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The Ministry of National Food Security and Research briefed the committee on the implementation status of decision taken by the committee last month for improvement of cotton crop in the country.

The committee also accorded approval to the proposal of Ministry of National Food Security and Research to extend the export period of surplus wheat from PASSCO’s stock. The committee also approved the proposal of Ministry of Industries and Production to allocate 66 MMFCD additional Mari Deep Gas to PPIB for power generation purposes.

Published in The Express Tribune, March 21st, 2019.

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