Scraping the bottom of the barrel

LAHORE: The Punjab government has stopped all development projects in the province, ceasing payments to contractors, Finance Department officials told The Express Tribune on Saturday. It is delaying payments even to its own departments they added.

The officials said the finance department has also stopped payments of travel allowances and utility bills.

“The government has directed us to stop payments to the general provident fund and not to entertain requests for commuted pensions”, said an official.

With the government trying to reduce its expenditure to a bare minimum the district accounts officers (DAO) and executive district officer (EDO) have been directed to stop payments to contractors.

To avoid being confronted by people the government owes money to some of these officers are not sitting in their offices.

The officers said that the current financial situation is partly due to the raise in the salaries and pensions of government employees.

This raises are costing the province an extra Rs5-6 billions a month. To make matters worse the provincial government is only getting Rs28-30 billion a month from the federal divisible revenue about Rs6 billion less than what the expectation.

Failure to make payments to contractors has sparked protests throughout the province. This month the government employees too had to wait up to a week to receive their pay.

The officials also alleged that the government has not yet returned the Rs5 billion borrowed from banks earlier this year to purchase grain from farmers although the grain has been sold in the market. “They have already spent that money”, added the official.

Finance Secretary Tariq Mehmood Pasha denied that there was a crisis. Everything, he said, was being done according to standard procedures.

Published in The Express Tribune, August 15^th, 2010.