ECC shows concern over supplementary grants

Updated April 18, 2019

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Approves Rs200m for ad campaigns of PM schemes. ─ APP/File
Approves Rs200m for ad campaigns of PM schemes. ─ APP/File

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday expressed serious concern over a floodgate of supplementary grants during the year, raising question marks over sanctity of the federal budget approved by the parliament.

The ECC also approved the launch of advertisement campaigns for promotion of five prime minister’s schemes —Poverty Alleviation (Ehsas Programme), Sehat Insaaf Scheme, PM’s Naya Pakistan Housing Scheme, Ramazan Package and Visa regime — at a cost of Rs200 million. The Ministry of Information and Broadcasting was asked to launch media campaign aiming to disseminate information relating to these initiatives, a senior official at the Ministry of Finance (MoF) said.

He said Finance Minister Asad Umar himself criticised repeated requests from various institutions and ministries for supplementary grants but then approved a series of them - worth billions of rupees - demanded by the ministries of defence, Kashmir Affairs & Gilgit-Baltistan and Federal Education and Professional Training.

According to the official, the minister had advised that approved supplementary grants not be made public at this stage and instead be made part of the next year’s budget for parliamentary approval as usual. “The committee also considered and approved various demands of divisions and ministries for supplementary and technical supplementary grants,” a statement confirmed.

Approves Rs200m for ad campaigns of PM schemes

He said the security expenditures had crossed budgetary ceilings by a wide margin mainly due to rupee depreciation and heightened tensions along the border.

In one of the recent briefings, Asad said a number of ministries and institutions disclosed to him that they had reported budgetary needs to MoF as part of the budget-making exercise last year with requests for allocations but were not entertained and advised to come up with supplementary demands at a later stage.

The MoF officially quoted the finance minister as saying that “budgetary needs of many organisations had not been 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 various departments, which would avoid the process for supplementary grants during this fiscal year. He said “the government is determined to phase out the supplementary grants in the future budgets.”

The meeting was also given an update by the Industries and Production Division about the status of Ramazan Package worth Rs2bn, approved by ECC about a month ago. The ECC directed Utility Stores Corporation (USC) to expedite the procurement of essential consumer items so as to provide timely relief to the people in Ramazan.

It was reported that USC was facing financial difficulties and therefore procurements for the package could get affected. As a result, the committee directed MoF and National Bank of Pakistan to extend maximum facilitation to USC in this regard while also constituting a four-member committee led by Railways Minister Sheikh Rashid Ahmed to oversee the implementation of Ramazan Package.

Moreover, the Ministry of Petroleum briefed ECC on the implementation of the committee’s decision regarding utilisation of Pakistan Railways services for transportation of petroleum products across the country. The Ministry of Railways had demanded that it had fuel supply contract with Pakistan State Oil for about two million tonnes of furnace oil but the fuel’s replacement with LNG had impacted its revenue stream which should be compensated through high speed diesel (HSD) transportation instead of furnace oil.

It was reported that the cost of movement of HSD through tankers was significantly higher but various feasibilities would need to be examined because major movement of HSD from Karachi to the north was mostly taking place through pipeline network besides some upcoming projects from Multan to Peshawar.

The Ministry of Railways informed the committee that it had the capacity to carry higher volumes and would work with the Ministry of Petroleum to explore further possibilities. The ECC decided to defer a final decision for the time being for want of further deliberations between the relevant ministries.

Published in Dawn, April 18th, 2019