By Asad Cheema
ISLAMABAD: Prime Minister Imran Khan has directed the Finance Ministry to review expenditure priorities indicated in the Budget Strategy Papers 2020-23, after cabinet members expressed apprehensions over the adverse impact of COVID-19 pandemic on the economic projections in documents, well informed sources confided in The Daily Mail. These instructions were issued during discussion on Budget Strategy Papers 2020-23 in the cabinet meeting held on March 17, 2020.
During the discussion on Budget Strategy Papers, a member of the cabinet suggested giving spending autonomy to the Ministries/Divisions through making block allocations in budget and leave the Ministries/ Divisions to decide on the bifurcation between development and non-development expenditure. In response, it was informed that Finance Division was already working on devolving greater financial powers to Principal Accounting Officer (PAO) i.e. Secretary of the Ministry/ Division.
A member of the cabinet raised concern that expenditure projections did not factor in the institutional reforms being carried out by the government as the spending level on running the federal government and pensions is almost same in the mid-term. A concern was also raised that autonomous organisations under various Ministries/ Divisions were not conducting external audits and appropriate instructions needed to be issued in this regard.
It was pointed that mid-term expenditure projections should not be reviewed in absolute terms but as a percentage of GDP, which suggest sizable reduction in current expenditure. The Prime Minister, however, underscored the need to further reduce the expenditure and directed Advisor to the Prime Minister on Institutional Reforms and Austerity, Dr Ishrat Hussain to develop a restructuring plan for PIA, besides Railways on which he already is working, to mitigate the financial haemorrhage of these PSEs. A member of the cabinet suggested review of the expenditure priorities indicated in Budget Strategy Paper 2020-23 in consultation with Ministries/ Divisions. The Prime Minister desired that a committee be constituted under Advisor to the Prime Minister on Finance and Revenue to deliberate on the issue. Highlighting the economic achievements of the present government, Advisor to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh indicated that Rs 5000 billions of legacy loans were being repaid without default.