ISLAMABAD: The Senate Standing Committee on Finance was shocked to learn that over 200 State-Owned Entities (SOEs), regulators and autonomous bodies have parked Rs1,000 billion in their respective bank accounts instead of depositing it into the Federal Consolidated Fund (FCF), in a clear violation of the Public Finance Management (PFM) Act 2019.
The PFM Act 2019 was passed by parliament seven years ago, but the Senate panel was stunned to ascertain that the Ministry of Finance deliberately closed its eyes, establishing a nexus that caused a high cost to the national exchequer.
The senators unanimously observed that the Securities and Exchange Commission of Pakistan (SECP) utilised Rs1.19 billion for provision of perks, privileges, gratuity and pension with the approval of its board. Although, the Auditor General of Pakistan raised an audit objection, the Ministry of Finance remained silent during the last two Departmental Audit Committee (DAC) meetings.
Ruling party Senator Anusha Rahman triggered the heated debate, stating that there was a need to submit details of the parked amounts of SOEs before the Upper House of Parliament, as her estimates suggested that around Rs2,000 billion had been parked in a manner that did not become part of the government’s overall financing. “This is a clear scam because such a huge amount is parked in commercial banks and these banks provided loans to the government at exorbitant rates,” said Chairman of the Senate Standing Committee on Finance, Senator Saleem Mandviwalla, on Thursday.
Additional Secretary Finance (Budget), Iftikhar Amjad, failed to convince the senators, while Finance Secretary Imdad Ullah Bosal remained absent from the meeting. Senator Anusha Rahman inquired if the Finance Ministry had issued the SOEs notification under Section 36 of the PFM Act 2019. The additional secretary Budget gave confusing replies, which infuriated her, prompting her to question again why the notification was not issued. She stated that this failure allowed SOEs, regulators and corporations to park Rs2,000 billion outside the FCF.
Minister of State for Finance Bilal Azhar Kiani later intervened, assuring the committee that he would take up the matter to ensure effective enforcement of the PFM Act 2019 after seven years. The Senate panel also received a briefing from the FBR on the status of asset declarations by government servants. It was informed that a digital asset declaration mechanism would be in place by December 2026.
