Govt spends Rs544.8b in grants

Around 53% of additional spending done on account of Covid-19 outbreak

ISLAMABAD: The Pakistan Tehreek-e-Insaf (PTI) government has spent Rs544.8 billion without the approval of parliament through supplementary grants during its second year in power, which amounts to nearly Rs323 billion or 145% higher than the previous fiscal year, showed the budget documents.

More than half of the additional spending - 53% to be precise - was because of the outbreak of a deadly pandemic, which is justified.

But out of Rs544.8 billion, an amount of Rs336 billion was spent through regular supplementary grants, which denies the government’s claim that it did not give any new supplementary grant. The remaining Rs208.8 billion was spent by making adjustments within the budget - known as technical grants.

After excluding spending on Covid-19-related activities, the spending through supplementary grants, either by making adjustments within the budget or issuing new cheques, was the result of either poor planning by all the federal ministries or less budgetary allocations.

In violation of the rules, the Ministry of Finance provided Rs101.3 billion supplementary budget to the Federal Board of Revenue (FBR) for the encashment of sales tax and income tax refunds bonds. However, according to the rules, the supplementary budget cannot be more than the original budget, which in case of the FBR was Rs4.4 billion.

The federal government had to cut the development budget besides compromising on other expenses to make room for additional spending.

In the fiscal year 2019-20 ending June 30, the Ministry of Finance issued Rs208.8 billion worth of technical supplementary grants - up by Rs92.8 billion or 80% over the previous fiscal year, showed the budget documents.

The regular supplementary grants stood at Rs336 billion - up by Rs230 billion or 216%, according to the budget documents. The government has now placed these details before the National Assembly to seek its ex-post facto approval.

An amount of Rs289.5 billion was spent to mitigate the impacts of the Covid-19 through an additional budget, according to the documents.

The government has given Rs100 billion in the regular supplementary budget for an emergency relief fund. An amount of Rs85.8 billion has been provided to the Ehsaas programme for onwards disbursements to needy people. The budget of Ehsaas programme, formerly known as Benazir Income Support Programme, was increased from Rs188 billion to Rs273.7 billion for the outgoing fiscal year.

The Rs26.3 billion supplementary budget was also given to the National Disaster Management Authority. Meanwhile, a total of Rs21.7 billion was given to Power Division for easing its financing constraints.

Prime Minister Imran Khan had announced Rs1.2 trillion economic relief package in March this year to meet the needs arising due to spread of the deadly pandemic.

However, the government gave away additional Rs40.6 billion in regular supplementary grants under the head of “others”. Similarly, Rs6 billion were given to Pakistan Railways in subsidy to meet losses.

The PTI government had set the budget deficit target for the outgoing fiscal year at 7.1% of the gross domestic product (GDP). But the budget documents showed that the deficit would hit a record 9.4% of the GDP, largely because of the badly affected tax revenues and expenditure slippages.

The government has granted Rs33.2 billion additional budget to the armed forces in the outgoing fiscal year, increasing total allocation for the defence budget to Rs1.2 trillion.

An amount of Rs3 billion in the supplementary budget has been proffered for fencing of the Pak-Iran border, according to the budget documents. Another Rs11.5 billion has been given to the army for recurring expenses of the Special Security Division. The Rs7 billion has been granted to medical stores of Pak army, according to the budget documents.

The military was also given Rs31.5 million for repair and maintenance of Cessna Grand Aircraft, which is in use of Prime Minister Imran Khan.

The government gave away Rs20.7 billion to the Pakistan State Oil (PSO) on account of exchange losses on FE-25, which deals with foreign currency account. Another Rs11.7 billion additional budget was provided to the PSO for payments to Kuwait Petroleum for credit facility on the exchange loss and default payment. The government also issued Rs9.7 billion supplementary budget to pay to commercial banks on account of foreign remittances promotion scheme.

The government also gave Rs43.5 billion to meet the shortfall in pension payments, suggesting that it did not fully reflect the pensions cost in the last budget to understate expenditures. The Rs27.8 billion were given for defence pensions and another Rs15.7 billion for civilian pensions.

For financing the development schemes of the parliamentarians, the government also issued Rs11.2 billion supplementary budget.

Published in The Express Tribune, June 14^th, 2020.

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