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April 18, 2019

ECC decides to phase out supplementary grants

Business

April 18, 2019

ISLAMABAD: The government will gradually wean various departments and ministries off supplementary grants through effective budgeting of their financial needs to ease fiscal deficit pressure, finance minister said on Wednesday.

“The government is determined to phase out the supplementary grants in the future budgets,” Umar said, addressing a meeting of the Economic Coordination Committee (ECC) of the cabinet. The committee considered and approved various demands of division ministries for supplementary and technical supplementary grants.

The finance minister said the budgetary needs of many organisations were not properly assessed at the time of preparation of budget estimate last year, which was leading to a large number of demands for supplementary grants. The minister emphasised the need for proper budgeting of the financial needs of various departments, “which would obviate the need for supplementary grants”. Governments usually release billions of rupees to enable various ministries and divisions to meet expenditure overruns and re-appropriations, upsetting fiscal position in the country that faced budget deficit equivalent to 6.6 percent of GDP during the last fiscal year of 2018/19. The present government wants to restrict the budget deficit within 5.6 percent of GDP during the current fiscal year. Analysts, however, expected it to swell at around seven percent in FY2019. The International Monetary Fund (IMF) projected Pakistan’s fiscal deficit to reach eight percent over the next five years. In its latest fiscal monitor report, the IMF forecast fiscal deficit at 7.2 percent in 2018/19, 8.7 percent in FY2020, eight percent in FY2021, 7.8 percent in FY2022, 7.6 percent in FY2023 and 7.7 percent in FY2024.

The ministry of petroleum briefed the committee on the implementation of the committee’s decision regarding utilisation of services of Pakistan Railways for transportation of petroleum products across the country. The ministry of railways informed the committee that it has the capacity to carry higher volumes and would work with the ministry of petroleum to explore further possibilities.

Industries and production division gave a presentation to update the committee about status of Ramzan package. The committee directed Utility Stores Corporation (USC) to expedite the procurement of essential consumer items to provide timely relief to the people in Ramazan. The committee also directed the ministry of finance and National Bank of Pakistan to extend maximum facilitation to the USC.

ECC constituted a four-member committee to be headed by the railways minister to oversee the implementation of Ramazan package.

The ECC approved, in principle, the proposal of ministry of information & broadcasting for media campaign aiming to disseminate information relating to initiatives on poverty alleviation, health and housing schemes.

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