Defence spending should be under checks, says Sheikh

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Finance Minister Dr Abdul Hafeez Sheikh urged on Saturday transparency and accountability in the utilisation of defence allocations as, he said, the armed forces “being government institutions are also accountable for their expenditures.”
Addressing a post-budget press conference, the minister said the government would not compromise on the defence budget as it was necessary for the security of the country. He said under the current security situation, the government could not compromise on defence expenditure as that would hurt the overall security situation of the country. He said, however, that the defence expenditure should be used transparently and its proper accounting should be done in view of the tight fiscal situation of the country.
“There must be a mechanism for checks and balance,” he said. The finance minister said the government, despite financial constraints, would still provide targeted subsidies to the poor even after it withdrew general subsidies in the federal budget for fiscal year 2011-12, and had taken various measures to that end such as increasing the allocation to the Benazir Income Support Programme (BISP) from Rs 35 billion to Rs 50 billion in the next fiscal year.
He said the Baitul Maal and micro-finance schemes would be strengthened further to provide relief to the poor. Sheikh said that the withdrawal of subsidies would not affect the common man as they were no longer needed because improvement in the system would counter-balance the impact made by the slash in subsidies. He said that the government had provided subsidies of around Rs 1 trillion in the last two fiscal years only for the energy sector.
The energy sector had proven to be the biggest drainer of revenue from the national exchequer in the last two years, he said, having also required a payment of Rs 421 billion to clear circular debt and Rs 250 billion in subsidies to the power sector. He said the government also incurred losses of Rs 50 billion in the form of subsidy to the petroleum sector. He also said the government planned to pursue 700,000 rich tax-evaders in the next fiscal year.
“Most of them have tax liabilities of above Rs 350,000 per annum. If they pay we will have ample revenues next fiscal,” said the finance minister. When Federal Board of Revenue (FBR) Chairman Salman Siddique was asked why the rest of the 1.6 million tax thieves were not going to be pursued during the next fiscal year, he said FBR lacked the huge manpower required to follow the initially selected tax thieves.