Finance ministry unaware of Rs815bn of NAB recoveries

ISLAMABAD: In a parliamentary testimony, the Ministry of Finance on Wednesday expressed complete ignorance about the whereabouts of over Rs821 billion, except Rs6.458bn, that the National Accountability Bureau (NAB) claimed to have recovered since its inception some 16 years ago.

Surprised to know that the ministry was unaware about the massive gap in the claims and the actual funds received by the national treasury, the Senate Standing Committee on Finance on Wednesday decided to seek help from the auditor general of Pakistan for a special audit.

The parliamentary panel also showed disappointment over the recent devaluations of rupee and its devastating impact on inflation.

Additional Finance Secretary Tanveer Butt informed the panel that only Rs6.458bn had been received in non-tax revenue over the past 16 years on account of NAB recoveries.

Responding to questions, Mr Butt said the finance ministry was unaware as to where the remaining amount went and was being utilised. He claimed that the finance ministry could not ask the anti-graft watchdog about the remaining Rs815bn. “The money was not being deposited in government accounts. It is not known in which account the NAB had deposited the recovery of Rs821 billion,” he added.

The committee decided to write to the Auditor General of Pakistan and NAB (Accounts) director general to appear before it before the next meeting.

Senator Talha Mahmood, the committee chairman, said the amount recovered by the NAB would also be audited.

In a paper sent to the Senate committee, NAB claimed Rs76bn as voluntary refund or plea-bargain, Rs122 as bank loan default recoveries, Rs60bn recovery on account of restructuring of loans, Rs46bn court fines imposed and over Rs500bn in different ‘indirect recoveries’.

Senator Saleem Mandviwala said the funds received from National Crimes Agency, the UK, had also not been deposited in the national kitty and was perhaps still being withheld.

The committee members while showing dissatisfaction over the explanations by the finance ministry and the State Bank of Pakistan over exchange rate losses termed the government policies “disastrous” for the country.

The committee noted that despite Rs57 per dollar depreciation, the government could only increase exports by just 3pc whereas its impact on inflation had been devastating.

Senator Talha said people had initially absorbed the impact of devaluation but the massive inflation became unbearable. He said people were least interested if exchange rate was artificial or genuine as they were crying over the rising prices of commodities. “We are totally dissatisfied with your briefing and will issue a letter to the governor [of] SBP,” said the Senate committee chairman as some members termed the statement made by State Bank Governor Reza Baqir in London as “uncalled for” in which he had said devaluation had also benefited a large number of overseas Pakistani.

SBP Deputy Governor Murtaza Syed acknowledged that the movement in exchange rate affected inflation but said the recent depreciation of exchange rate did not have much impact on inflation as the prices were being stoked food commodities and energy prices in the global market.

Senator Talha said rupee was under pressure primarily because of smuggling of dollars from Pakistan into Afghanistan and also referred to a person from whom a huge amount of dollars were seized in Lahore.

The SBP deputy governor agreed with the committee chairman that the supply and demand situation in the market was primary benchmark for determination of exchange rate. The meeting was informed that flexible exchange rate was adopted after going into the IMF programme.

Senator Kamil Ali Agha said the SBP governor was not a political office and should not make political statements.

He said the government and the SBP were responsible to stabilise rupee value. He said Ishaq Dar was called as “Ishaq Dollar” because of his interference with the dollar, but “today there are over 24 hands involved in it”.

Senator Sadia Abbasi said household budgets had increased by 60pc during last one year and even the prices of commodities at Utility Stores Corporation had been raised drastically.

The committee decided to seek clarification on the SBP governor’s statement in London and also sought a mechanism with respect to intervention in the exchange rate market from the SBP. Senator Abbasi demanded that the committee should also be informed about the recent negotiations with the International Monetary Fund (IMF), but the additional finance secretary said he could not give a detailed answer in this regard seeking more time to get details of the negotiations.

The Senate committee chairman decided to invite finance adviser and other officials for a briefing to know details of the recent agreement with the IMF.