Senate debate on budget

Opposition accuses govt of hiding facts; Dar points out contradictions in govt’s own figures; Omar Ayub challenges statement



ISLAMABAD: Former finance minister Senator Ishaq Dar on Wednesday accused the government in the Senate of fudging facts to hide the budget deficit, while pointing out several contradictions in the government’s own figures.

After the 40 minutes opening speech of the opposition Senator Ishaq Dar in the Senate, Minister of State for Finance Omar Gohar Ayub Khan came out with a challenge that Ishaq Dar made a wrong statement and said that he would reply all his charges and claims in his winding-up speech. They also exchanged hot words while countering each other’s claims.

Ishaq Dar stated that what the minister of state for finance had presented in his budget speech was based on the Economic Survey launched just a day before the budget announcement.

Supporting his claim Dar sent a copy of the economic survey from where he quoted the figures to Omar Ayub Khan but the minister continued challenging the opposition senator over his assessment on the budget.

The Senate session started with a delay of 90 minutes of the schedule time due to the parliamentary party meeting of the ruling coalition in the Senate in which Minister of State for Finance Omar Gohar Ayub Khan briefed the party Senators about the budget.

Leader of the Democratic Alliance in the Senate Mian Raza Rabbani took strong exception to delay the senate session. Earlier, kicking off the debate on budget in the Upper House, Ishaq Dar said that relief provided in the budget for the salaried class, government employees and pensioners was too small and a gimmick for the forthcoming elections in the country.

“The 15 per cent relief announced in the budget is inadequate keeping in view the current level of inflation and cost of living and the relief to salaried persons and government employees should be increased at least 20 per cent,” he added.

Dar said the overall budget deficit for the year 2004-05 which was claimed at three per cent of GDP has now been reported at 3.3 per cent of the GDP. “I had stated in my speech last year in the Senate that three per cent claim was idealistic and the deficit for 2005-06 is now being claimed at 4.2 which again, in my view, was unrealistic,” he said.

He said the current expenditure figure of Rs 782.1 billion used in the Economic Survey for working out the fiscal deficit at 4.2 per cent has been reported at Rs 918.79 billion in the budget document, which means an under statement of Rs 136.7 billion of current expenditures. “It clearly implies that the fiscal deficit for 2005-06 at 4.2 percent is being wrongly claimed,” he added.

He said the fiscal deficit in 2005-06 has increased to Rs 327.4 billion as compared to Rs 217 billion in 2004-05. Dar said the fiscal deficit of Rs 327.4 billion in 2005-06 was being financed through external resources of 118.3 billion, non-banking borrowing of Rs 22.4 billion, bank borrowing of Rs 96.7 billion and privatisation proceeds of Rs 90 billion.

Dar claimed the government since the fiscal year 2001-02 was using the privatisation proceeds to finance the budgetary deficit. Giving details he said in the fiscal year 2001-02 Rs 8.35 billion, in 2002-03 Rs 3.70 billion, in 2003-04 Rs 11.40 billion and in year 2004-05 Rs 90 billion of the privatisation proceeds were used to finance the budget deficit. “I fear the government target of getting Rs 75 billion through the privatisation proceeds for the next fiscal year would also be used to finance the budget deficit,” he added.

Dar said the government claim of reducing the domestic and external debt was totally false as the domestic debt was actually increased from Rs 1453 billion in June 1999 to Rs 2267 billion at the end of March 2006, indicating an increase of Rs 814 billion.

As far as the external debt was concerned, he said, the public and publicly guaranteed debt had increased from $28.3 billion as on June 1999 to $31.6 billion on March 2006. He said the outstanding external debt amounted to $30.2 billion as on June 1999, was increased to $37.53 billion by March 2006. “One can easily judge the reality of the repeated rhetoric of the present government of “breaking and burying the begging bowl,” he added.

Talking on the privatisation policy of the government he said the PTCL privatisation was grossly mishandled and the departure from the payment terms settled with the buyer have not been fully made public, which raised many questions about the deal.

Pointing out the government extravagance expenditure, Dar said the cabinet division utilised Rs 1.853 billion against the allocated amount of Rs 958.06 million indicating additional expenditure of Rs 895.3 million in 2005-06, Prime Minister’s Secretariat allocation in the last year budget was 234.09 million and were spent 553.3 million showing Rs 321 million extra from the allocated amount.

Senator Nisar Memon of the treasury benches said the budget fulfils all promises made by President Gen Pervez Musharraf with the nation. He said in a total outlay of Rs 1.3 trillion budget the government has provided subsidies of Rs 109 billion.

He said the defence budget was increased to only 12 per cent. “In the real term the increase was only four per cent as remaining eight per cent was due to the eight per cent increase in the inflation,” he added.

Memon said the United States had increased its defence budget due to the war against terror and Pakistan was also facing the same situation as miscreants by crossing the border from Afghanistan were entering into Pakistan.

He said like the parliamentarians the bureaucracy should also make their assets public. He also stressed the need for parliamentary monitoring for the implementation of the budget. APP adds: Taking part in the debate, Senator Haroon Akhtar appreciated the government’s steps to provide relief to the common man. He said Rs 12 billion has been allocated to provide daily use commodities like wheat, sugar and pulses at subsidised rates.

Senator Liaquat Ali Bangalzai suggested that local currency should be linked with Euro instead of US dollar, which in his opinion will benefit the economy about Rs 12 billion per annum. Terming the 15 per cent raise in salaries of government employees insufficient, he said that raise should also be given on allowances.