Govt says Rs64 billion Saudi gift not double-booked

ISLAMABAD: The government has worked out details of statistical discrepancy for scaling down to Rs25 billion against earlier indicated amount of Rs167 billion for fiscal year 2013-14 for proving one point that non tax revenue of Rs64 billion out of total amount received as Saudi gift was not double booked to understate the budget deficit.

The Senate Standing Committee on Finance under the chairmanship of Senator Saleem Mandviwalla has summoned the Finance Ministry high-ups for its scheduled meeting for Thursday (today), but it was postponed at 11hour because of non-availability of members and lack of quorum.

It resulted in postponing of scheduled meeting till next week. The Chairman of Senate Panel, Saleem Mandviwalla, told The News on Wednesday night that now the committee would meet probably on September 13 &15, 2017, for taking up different issues.

The committee had sought briefing from the Finance Division to scrutinise whether they allegedly involved in double booking of Rs64 billion of the Pakistan Development Fund Limited (PDFL) as non-tax revenue to understate the budget deficit for two different financial years in 2013-14 and 2016-17. It is yet to see how much top guns of the Finance Ministry will be able to satisfy parliamentarians belonging to the Upper House of Parliament in upcoming meeting.

After surfacing the allegation of double booking of the same amount, Secretary Finance Shahid Mehmood formed high-powered committee comprising of Finance Ministry, Control General Accounts (CGA) and AGPR high-ups to work out details of statistical discrepancy for fiscal year 2013-14.

The high-powered team, comprised of Sajid Ayub Accounts Officer, Finance Division; Noaman Ali, Director (Financial Reporting) CGA Office, Islamabad, and M Javed Khan, Accounts Officer AGPR,Islamabad, and the team visited the SBP, Karachi, on August 23 and 24, 2017, and the data was exchanged with the SBP. The team also visited AGPR, Karachi, and found that the net unidentified amount comes to Rs25.003 billion.

The worked out details showed that government deposits with SBP stood at Rs133.153 billion in accordance with the AGPR record while this amount was standing at Rs287.311 billion in accordance with the SBP data, so the difference was Rs154.158 billion in 2013-14. The government deposits with commercial banks were standing at Rs63.028 billion in accordance with the SBP data, so the difference remained at Rs63.028 billion. The amount of T-bills stood at Rs597.183 billion in accordance with the AGPR data and Rs585.259 billion in accordance with the SBP data so difference stood at Rs11.924 billion. The difference on account of PIBs stood at Rs12.597 billion. The total difference amount stood at Rs192.665 billion.

After reconciliation exercise, the discrepancy stood at Rs167.662 billion, so after taking into account of Rs63.028 billion as deposit with commercial banks, the discrepancy amount reduced to Rs104.634 billion. After taking into account less expenditures of Rs154, the remaining amount was Rs49 billion.

Another amount of Rs24 billion was deducted as excess receipt report by the SBP, the remaining discrepancy amount reduced to Rs25.003 billion.    

The Finance Ministry’s top official, who is known as “guru” of fiscal data, told The News that this grant money was treated as part of capital receipts and placed as below the line item.

He explained that this amount was not used to reduce the budget deficit for fiscal year 2013-14, rather it was treated as financing item.

He said the IMF had also scrutinised the gifted amount of $1.5 billion as at that time Islamabad was under the IMF funded programme of Extended Fund Facility (EFF). “We had satisfied the IMF team at that time because there was nothing wrong committed by the economic managers,” he argued.

This money, he said, was never taken as government revenue receipts, but it was a foreign grant placed under external financing. This was booked as expense of the federal government as grant in aid to the Pakistan Development Fund Limited (PDFL).

The PDFL, the official said, has been incorporated as a non-banking financial institution with the objective of financing/investing in infrastructure projects.

The PDFL identified two power projects Haveli Bahadur Shah and Balloki owned by the National Power Parks Management Company (Pvt) Limited (NPPMCL) where it could make investments out of available funds. After holding extensive consultations with stakeholders, including the Ministry of Water & Power, the PDFL injected money into these two projects and acquired shares worth Rs64 billion which was paid to the federal government as non-tax revenue receipts. Now this treatment as non-tax revenue receipts, he said, had helped the government for reducing the budget deficit up to the extent of Rs64 billion for fiscal year 2016-17 ended on June 30, 2017.