Still confident of the anticipated external inflows, the finance ministry on Monday remained stuck to its budget deficit of 5 per cent claiming the projected foreign inflows of Coalition Support Fund, PTCL arrears and proceeds from auction of 3G licences will materialise during the remaining period of the current fiscal year.
Briefing the Senate Standing Committee on finance, Secretary Finance Abdul Wajid Rana said IMF’s projection of 7 per cent budget deficit was based on certain assumptions that country’s budgeted foreign inflows would not materialise during the ongoing fiscal year 2011-12. However, he said ministry of finance’s projections were that the budget deficit would be less than 5 per cent and it was also based on certain assumptions that country’s foreign inflows like Coalition Support Fund, PTCL arrears from Etisalat, auction of 3-G and 4-G licences, exports proceeds and remittances would materialise as per projections before June 30, 2012.
Senator Ahmed Ali chaired the meeting which was briefed on the IMF report on Pakistan’s economy which presented a negative picture of the state of economy. Secretary finance said Pakistan was not discussing any new IMF loan programme nor any shadow IMF programme is under implementation in Pakistan. He said provinces gave a budget surplus of Rs134 billion during the last fiscal year and assured that they were in a position to create a budget surplus to contain the budget deficit at desired level during the current fiscal year. He assured the committee that revenue collection target of Rs1952 billion would be achieved.
Governor State Bank of Pakistan Yasin Anwar informed the committee that Pakistan would amend its Anti-Terrorism Act to ensure enforcement of its provisions in financial services sector for conviction of persons found involved in money laundering. He said to prepare a new legislation for making amendments in Anti-Terrorism Act and ministry of finance, ministry of interior, Securities and Exchange Commission of Pakistan (SECP) and SBP along with other stakeholders were working on new legislations to put Pakistan back on Anti-Money Laundering compliant countries list. Governor SBP strongly defended the monetary policy and termed IMF’s stance of accommodative monetary policy stance as wrong and said the bank’s monetary policy was not accommodative. He said SBP and SECP are engaged in development of debt market in Pakistan as well as long term financing arrangement.
Secretary finance present in the meeting informed that Pakistan was not black listed by FATF, however, country’s name has been placed among the list of countries that have been included in the public statement. He was of the view that some key amendments were needed in Pakistan’s Anti-Money Laundering regime legislation.
However, members were concerned over attitude of the ministry of finance for not making any effort to avoid such kind of mishaps at international forums. Senator Ahmad Ali was of the view that black listing by FATF would have negative implications on Pakistan. The members were critical that the committee had passed anti-money laundering legislation to avoid Pakistan’s black listing one year ago and it was decided that further required amendments would be brought into Parliament within next six months to strengthen Pakistan’s status at international forums, however, finance ministry had not taken it seriously as a result of which, the country got black listed by FATF.
Finance ministry sticks to 5pc budget deficit for the fiscal year
