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Monday November 29, 2021

Senate body recommends Dar to resign

September 23, 2017

Islamabad :The Senate Standing Committee on Finance recommended that Minister for Finance Ishaq Dar to tender his resignation because arrest warrant issued for him was defaming democracy, Parliament and the Ministry of Finance.

“The issuance of warrant for Ishaq Dar’s arrest is becoming headlines in international media, and I received calls from China inquiring about these happenings in Pakistan. In such circumstances, I will ask Finance Minister Ishaq Dar to resign from his slot,” said Senate Standing Committee on Finance Chairman Senator Saleem Mandviwalla while chairing a meeting of the parliamentary panel here on Thursday.

Senator Illyas Bailour from the ANP was the only who objected to the suggestion made by Senator Mohsin Aziz by demanding from the finance minister to resign immediately in order to avoid bad names to democracy and Parliament in Pakistan.

“I cannot support any such suggestion when Ishaq Dar is in hot water,” Illias Bailour stated during the proceedings of the meeting. He said that he would make call to his colleague who got elected thrice--once as member of the National Assembly and twice as senator.

The chairman of the committee, Saleem Mandviwalla, also said that he would also call him in order to make request for tendering his resignation. However, he continued to argue that it was in his interest to resign from his post immediately.

 Earlier, the State Bank of Pakistan (SBP) opposed changes for amending the Protection of Economic Reform Act, 1992, as chairman of the panel tabled it as private member bill. The SBP high-ups argued that the changes proposed in the bill were already made part of manuals of regulations, so there was no need to further amend this law.

The Chairman of Senate Panel Senator Saleem Mandviwalla did not agree to the stance taken by the SBP high-ups and said that they were opposing the proposed amendments because of their fears that foreign current amount of $7 billion might fly outside Pakistan and such fears did not have any valid grounds. After heated debate, the committee decided to defer this proposed amendments to Para till next meeting.

The committee also took up double booking of Rs64 billion of Pakistan Development Fund Limited (PDFL) as non-tax revenue to understate the budget deficit, the Finance Ministry, in its written reply, stated that Pakistan received a grant of $1.5 billion from Saudi Arabia in 2013-14 in two tranches of $750 million each. The purpose of the grant was to undertake development activities in the country particularly in the energy related projects. The standard mechanism for utilising such grants is that the State Bank of Pakistan upon receipt of foreign grant, provides equivalent amount in rupees into the government’s account known as Central Account Number one.

This amount, Additional Secretary Budget Ministry of Finance told the committee that it was taken as grant receipt and booked as expense in the same fiscal year 2013-14. He said that the Saudi money was not utilised to understate the budget deficit in 2013-14 as if it was used the budget deficit would have slashed down by 0.7 percent of the GDP.

In 2014, the federal government formed a company registered with SECP named Pakistan Development Fund Limited and the amount was transferred to the account of PDFL. This amount was not shown as non tax revenue but instead as a financing item in shape of foreign grant. The data of fiscal operation for 2013-14 shows the same and could be accessed even now. In addition, as the amount was transferred into PDFL account; therefore, it was booked as an expenditure resulting into increase in the fiscal deficit. In the fiscal year 2016-17, the PDFL acquired the shares of government owned companies for which it transferred Rs64 billion to the government, and this time the amount was taken as non-tax revenue receipts. So there was no double counting committed by the Finance Division to understate the budget deficit, the finance secretary concluded.