National Assembly Body Express Concerns On Different Proposed 'Amendment Bill's'

National Assembly body express concerns on different proposed 'Amendment Bill's'

The National Assembly Standing Committee Finance and Revenue on Friday expressed their concerns regarding different proposed amendments bills including "The Post Office Cash Certificate (Amendment) Bill, 2020"

ISLAMABAD, (UrduPoint / Pakistan Point News - 12th Feb, 2021 ):The National Assembly Standing Committee Finance and Revenue on Friday expressed their concerns regarding different proposed amendments bills including "The Post Office Cash Certificate (Amendment) Bill, 2020".

The National Assembly Standing Committee on Finance and Revenue was held in Constitution room Parliament House, Islamabad, under the chairmanship of MNA, Faiz Ullah.

The Committee also deferred another two amendment bills including "The Post Office National Savings Certificates (Amendment) Bill, 2020" and The Government Savings Bank (Amendment) Bill, 2020" (Government Bill) in meeting held.

The Committee deferred the Bills and decided that view point of Ministry of Law should be obtained in the up-coming meeting of the Committee thereon.

The Additional Secretary Ministry of Finance, informed the Committee that in the back drop of Judgment of the Hon. Supreme Court of Pakistan the Federal Cabinet inter-alia decided that all Ministries and Divisions should in consultation with Law and Justice Division will make amendments in respective Act/Rules and replace the words "Federal Government with appropriate authority/authorities.

He also explained the causes for suggesting these changes in different sections in the Bill.

The Committee deferred agenda item No. 4 regarding scrutiny of the budgetary proposals of the Ministry of Finance and Revenue due to late receiving of brief by the Finance Division and decided that next meeting in this respect will be held on 22nd February, 2021.

The Federal Secretary Ministry of Finance Kamran Ali Afzal, briefed the Committee about circular debt and its financial implication for upcoming budget.

He informed that circular debt was of two types i.e. Debt Stock and Flow.

While, talking about the flow debt he said that due to continuous rising of heavy payables charge and late payment surcharge that was rising about Rs.45 billion every month currently.

Later on, Additional Secretary, Finance Division informed the Committee about the causes of circular debt and presented the important numbers for December 2020 in total and breakup wise.

He said that PHPL/CPPA number can vary for want of reconciliation or payments in transit.

He further highlighted the key initiatives adopted by the present Government such as Mobilized funding of Rs.400 billion through Islamic financing to clear the debt stock, Rationalized tariff determination with minimum impact on lower category of consumers 1-300/units) and released TDS Rs.226 billion in FY 2019-20 and budgetary allocation of Tariff differential.

He said subsidy of Rs.52 billion has been released, so far.

Secretary Finance Division informed that Finance Division was working with Power Division on two pronged strategy i.e. settlement of debt stock and capping the flow including debt stock of PHPL Rs.806 billion to public debt which will be paid over the next five years. Accordingly Rs.72 billion will be paid to lending banks during the current financial years and an amount of Rs.

28 billion has been paid till date in that account.

The Secretary stated that currently the Government has decided to settle the payable CD of over Rs.1300 billion by taking certain measures such as engaging IPPs for voluntary reduction in tariff and settlement of outstanding amount as of November, 2021 Rs.500 billion in two tranches i.e. 40% in next 3-4 weeks and 60% in August, circular debt management plan (CDMP) implementation is also in the offing to offset the negative impact of CD on the economy inter alia with the key pillars.

The Committee Members have expressed their grave concerns about the policies adopted by the Government and loop holes of its implementation with regard to prevent the spread of circular debt.

The Committee Members were of the view that increase in circular debt will create huge problems for economy of the country, especially towards the smooth functioning of the industries.

After detailed discussion, the Committee unanimously decided that Power Division may be invited in the next meeting of the Committee for further deliberations in this regard.

Director, State Bank of Pakistan (SBP),Muhammad Ali Malik, apprised the Committee about the Foreign Exchange Reserves vis--vis Capital Account Pressure for the remaining FY2021, in light of increasing forward swap position. He said, since June, 2019, SBPs Fx forward swap liabilities have shown a declining trend in general and have been reduced to $4.6 billion at the end of November, 2020 which showed an improvement of $3.4 billion and $1.2 billion from June, 2019 and June, 2020 respectively, in addition to this improvement in SBP's forward swap position, SBP Fx reserves have also been improved for instance, SBP's Fx reserves that were recorded at $7.3 billion at the end of June, 2020, currently, SBP's Fx reserves stood at $13.4 billion as on 8th January, 2021.

This improvement of SBP's Fx reserves and forward swap position is a reflection of improved balance of payment position of the country and Pakistan's current account posted a surplus of $ 1.6 million in the first five months of FY2021.

The Committee Members have expressed their apprehensions with regard to expecting pressure on foreign reserves due to upcoming repayment schedules, in case the suspension of IMF Program.

However, Director SBP responded that Chinese Debt Repayments can be rollover and IMF Program could be extended.

He also informed the Committee that Government has received $480 million in 'Roshan-Pakistan Program'.

The meeting was attended by MNAs, Sadaqat Ali Khan Abbasi, Makhdoom Syed Sami-ul-Hassan Gillani, Jamil Ahmed Khan, Faheem Khan, Dr. Ramesh Kumar Vankwani, Qaiser Ahmed Sheikh, Chaudhary Khalid Javed, Ali Pervaiz, Dr. Aisha Ghaus Pasha, Ms. Nafisa Shah, Syed Naveed Qamar (through video link) and Ms. Hina Rabbani Khar (through video link), MNAs were attended the meeting.

The meeting was also attended by the senior officers from M/o Finance, SBP, FBR, and SECP.