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Express Tribune
3 days ago
- Politics
- Express Tribune
PTI criticises VIP vehicle spending
The Pakistan Tehreek-e-Insaf (PTI) has criticised the Punjab government for approving the purchase of hundreds of high-end vehicles for officials amid ongoing economic hardship and underfunded public services. In an statement, the party said the government has allocated over Rs2.1 billion for 283 official vehicles, including 10 bulletproof vehicles costing Rs500 million for senior police officers, 48 protocol vehicles priced at Rs900 million and 76 cars for ministers and senior bureaucrats at an estimated Rs710 million. Additional spending on fuel and maintenance will also be required. The PTI said the spending reflects a "growing disconnect" between the leadership and the people of Punjab who continue to face inflation, unemployment and deteriorating public services. It highlighted significant increases in allocations for elite government offices. The budget for the Governor House has increased by 870 per cent to Rs1.53 billion, while allocations for provincial ministers have more than tripled to Rs1.07 billion, it stated. The Chief Minister's Office received a 19% hike to Rs1.46 billion, and the Punjab Assembly's budget rose 47% to Rs7.38 billion. The commissioners' offices reportedly overspent Rs319 million during current financial year and are now allocated Rs1.85 billion for the next fiscal year. The Chief Minister's Inspection Team's budget also increased by 26% following unauthorised spending of Rs182 million. "These spending patterns are a political indictment of the government's misplaced priorities," the PTI said. "While basic sectors like health, education, and agriculture remain underfunded, public officials are rewarding themselves with expensive perks." The party also criticised the chief minister's prolonged absence from the assembly despite a growing budget for her office, calling it a "symbol of the administration's lack of accountability". The party demanded a forensic audit by the National Accountability Bureau (NAB) into the luxury vehicle purchases and the associated budget increases. It called for immediate reversal of unauthorised expenditures and legal action against those responsible for diverting public resources.
Express Tribune
25-05-2025
- Business
- Express Tribune
IMF says talks on budget to continue
Listen to article The International Monetary Fund (IMF) on Saturday returned to Washington without formally concluding discussions, saying that the talks would continue in coming days with a view to "agreeing on the budget", in a statement that shows gaps between the two sides. "We will continue discussions towards agreeing over the authorities' fiscal year 2026 budget over the coming days," stated Nathan Porter, the outgoing Mission Chief to Pakistan, in a statement issued after the end of 10-day talks held on the contours of the new budget. Porter said that the discussions focused on actions to enhance revenueincluding by bolstering compliance and expanding the tax baseand prioritise expenditure". The IMF mission was scheduled to arrive in Pakistan on May 13 till May 23 but due to India-Pakistan tensions, it held the first round of talks from Turkyia. The face-to-face discussions began on May 19 from Islamabad but did not conclude within the pre-agreed timeframe. The IMF said that its staff visit was focused on recent economic developments, programme implementation, and the budget strategy for fiscal year 2026. The government sources said that there was broader understanding on the next fiscal year's overarching goal of primary budget surplus; however, there were gaps in the understanding of both sides, particularly over the modus operandi to reach the goal. Porter said that the authorities concerned reaffirmed their commitment to fiscal consolidation while safeguarding social and priority expenditures, aiming for a primary surplus of 1.6% of GDP in FY2026. At the next fiscal year's projected size of the economy, the surplus will be equal to nearly Rs2.1 trillion, which is slightly lower than what the Ministry of Finance stated last week. Interestingly, the IMF said that based on the preliminary findings of this mission, the IMF staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision. The government sources said still no consensus had been reached over the next fiscal year's tax target, some revenue measures and relief to certain sectors. They said that the target would depend on the spending outlays for the three major heads of the budget. There were also gaps on the points of giving relief to the salaried class, the real estate sector and taxing of pensions, said the sources. Last week, Prime Minister Shehbaz Sharif termed the proposed relief for the salaried class by the FBR as insufficient and instead asked the tax machinery to secure more relief. The senior FBR and the finance ministry negotiators said that the quantum of the salaried class relief was not yet decided. The sources said that the IMF asked Pakistan to propose alternate measures to provide relief to the salaried class. The Fund suggested imposing taxes on high-end pensioners and using the money for providing relief to the salaried class. However, the IMF's condition to link relief for the salaried class with other measures which, in fact, is a reversal of injustice done to it in the last budget, was not justified. The salaried class has already paid Rs437 billion in income tax compared to less than Rs4 million by the traders. The IMF's statement on broadening the tax base seems cosmetic, as it did not do anything against the government's failure to collect due taxes from retailers. The sources said that the government's view about taxing the pensioners was that it would be a politically difficult decision to tax the high-end pensioners. The government is again inclined to provide relief to the realty sector, particularly reducing the transaction taxes, which is not in line with the IMF policy for the sector. The IMF had already agreed to abolish the federal excise duty, FBR Chairman Rashid Langrial said last month. Nathan said that the IMF "held constructive discussions with the authorities on their fiscal year 2026 budget proposals and broader economic policy, and reform agenda supported by the 2024 Extended Fund Facility (EFF) and the 2025 Resilience and Sustainability Facility (RSF)". Porter said that discussions also covered ongoing energy sector reforms aimed at improving financial viability and reducing the high-cost structure of Pakistan's power sector as well as other structural reforms which will help foster sustainable growth and promote a more level playing field for business and investment. The sources said that the IMF did not agree to the Power Division to allocate nearly 1% of the GDP power subsidies and consented to give Rs1.04 trillion. The government has already delayed the budget by over one week to June 10th after it could not timely sort out all the issues before approving the summary to announce the budget on June 2. Porter said that Pakistan also emphasized their commitment to ensuring sound macroeconomic policy making and building buffers. "In this context, maintaining an appropriately tight and data-dependent monetary policy remains a priority to ensure inflation is anchored within the central bank's medium-term target range of 5-7%" said Porter. Porter reiterated his earlier statement and emphasized that "rebuilding foreign exchange reserve buffers, preserving a fully functioning FX market, and allowing for greater exchange rate flexibility are critical to strengthening resilience to external shocks". Despite the IMF programme, Pakistan this time is not able to fetch in major foreign loans due to a poor credit rating. Porter said that the IMF team will remain engaged and continue its close dialogue with the authorities and the next mission associated with the next EFF and RSF reviews is expected in the second half of 2025.
Express Tribune
22-05-2025
- Business
- Express Tribune
Defence budget may increase manifold
Listen to article Pakistan may further increase the proposed defence budget for the next fiscal year to deal with the Indian aggression and spend more on indigenous research and development, in a move that may also require the provincial governments to share the additional cost. Official sources told The Express Tribune that due to rapid security-related developments, the authorities concerned have started considering whether the earlier agreed 18% increase in the defence budget for fiscal year 2025-26 will be sufficient. The issue has been discussed at the level of the Ministry of Finance, the Ministry of Defence and also with the International Monetary Fund, said the sources. While responding to a question whether Pakistan requested the IMF to allow further increase in defence budget and to compensate it downward adjust the agreed primary budget surplus target, Finance Minister Muhammad Aurangzeb replied that "we remain committed to stay the course both in terms of structural reform agenda and meeting all quantitative and structural benchmarks". Pre-May 10, the federal government had decided to give an 18% increase in the defence budget over last year's allocation of Rs2.1 trillion. This has also been agreed between the Pakistan Peoples Party and the Pakistan Muslim League-Nawaz during a meeting chaired by Prime Minister Shehbaz Sharif. However, the IMF had indicated Rs2.42 trillion for defence spending for the next fiscal year, which was higher by only 12%. The sources said that the IMF did not have an issue with the increase in the defence budget, provided the government has a fiscal room to fund it without compromising the primary budget surplus target of around Rs2.2 trillion or 1.7% of GDP. The discussions are taking place at a time when the IMF's top man for the region, Jihaz Azour, was in Islamabad. Jihad held important meetings on Wednesday, including with the Finance Minister Muhammad Aurangzeb and some with other high profile state dignitaries, said the sources. Jihad is also scheduled to meet with the Prime Minister today (Thursday). The sources said in order to meet the heightened security situation, there was a need to increase the defence budget by at least one-fourth. This would require around Rs500 billion jump over this fiscal year, which was necessary to replenish the arsenals. The sources said that the additional money was also needed for the armed forces development programme and clearing some past defence-related liabilities. For this fiscal year, Rs270 billion had been allocated for the armed forces development programme, which may have to be significantly increased in the light of regional developments, said the sources. The additional financial needs to cement the country's defence have to be shouldered by the provinces. In a meeting with the Prime Minister a few days ago, Petroleum Minister Ali Pervaiz Malik had proposed that the provincial governments should bear at least half of the additional defence cost. The provinces are rich and have huge cash surpluses while the federal government is running in deficit. India attacked Punjab and Sindh provinces and there is a need that also the provinces now should come forward to bear the cost, remarked the government officials. The Finance Ministry was also considering diverting some of the unproductive subsidies towards meeting the nation's additional defence budget needs. During one of recent meetings, the IMF's Mission Chief pointed towards allocating over Rs1 trillion for power sector subsidies despite the fact that electricity prices have come down. But the Power Division was asking for more money, said the sources. The Finance Ministry can also divert some of the unproductive subsidies given for various banking sector schemes towards meeting the defence needs. The coalition partners were battling for more development budget while terming the proposed Rs921 billion worth Public Sector Development Programme insufficient for the next fiscal year. Prime Minister Shehbaz Sharif has already constituted a committee to review the possibility of further increasing the development budget. The government was contemplating increasing the development budget to over Rs1 trillion but the Finance Ministry wanted to restrict it and instead put money for the defence purposes. The FBR remains the weakest link and a reason for the lower than the required allocations for the defence and the development. The FBR has been missing its tax targets by wide margins and it's almost all initiatives have backfired. Some of the IMF-FBR meetings this week did not go well due to the FBR's inability to fulfill its commitments. Prime Minister Shehbaz Sharif on Wednesday constituted a committee to address the issue of stuck-up refunds of the refineries due to bad taxation policies and to inflate collection. It was decided that the Petroleum Division will consult with the Finance Division and Revenue Division to finalize the proposal regarding adjustment mechanism of sales tax on refinery products, according to the decision. There is also a need to end the unjustified 1% advance income tax on exports in the budget after the normal tax regime has taken effect from this fiscal year. Pakistan on Wednesday blamed India for a deadly attack on a school bus. The Prime Minister's Office stated on Wednesday that in a reprehensible and cowardly act of terrorism, a school bus carrying innocent children was targeted today in Khuzdar, Balochistan by state sponsored proxies (Fitna Al Hindustan) of India which the world has largely come to know as epicenter of instability in the region. Sequel to gross failure to intimidate Pakistan through overt military means, dastardly terrorist incidents are being orchestrated through their proxies at an intensified scale in Balochistan and Khyber Pakhtunkhwa, deliberately targeting civilians in a futile attempt to destabilize the Pakistan, according to the Prime Minister's Office. The dastardly incident led to martyrdom of three innocent children and two soldiers along with 53 injured including 39 innocent children of which 8 are critical, according to the government. Given the heightened tensions, the authorities said that the next year's defence budget has to be exceptionally increase one-time to strengthen the capabilities of the army, navy and the air force.
Hans India
20-05-2025
- Business
- Hans India
Sebi slaps Rs 2.1-cr demand notice on Mehul Choksi
New Delhi: Markets regulator Sebi has sent a notice to absconding diamantaire Mehul Choksi asking him to pay Rs2.1 crore in a case of violation of insider trading rules in the shares of Gitanjali Gems Ltd and warned of attachment of assets as well as bank accounts if he fails to make the payment within 15 days. The demand notice came after Choksi failed to pay the fine imposed by the Securities and Exchange Board of India (Sebi) in January 2022. Choksi, who was the chairman and managing director as well as part of promoter group of Gitanjali Gems, is the maternal uncle of Nirav Modi. Both are facing charges of defrauding state-owned Punjab National Bank (PNB) of more than Rs14,000 crore. Choksi and Modi fled India after the PNB scam came to light in early 2018. Last month, Choksi was arrested in Belgium following an extradition request by Indian probe agencies. He was located in Belgium last year when he went there on the grounds of getting medical treatment. He had been staying in Antigua since 2018 after leaving India. Modi was arrested by the Scotland Yard Police in March 2019 and is currently lodged in jail in that country. In a fresh recovery notice dated May 15, the Securities and Exchanges Board of India (Sebi) directed Choksi to pay Rs 2.1 crore within 15 days. This included a penalty of Rs 1.5 crore and an interest of Rs 60 lakh. In the event of non-payment of dues, the market regulator said it will recover the amount by attaching and selling his moveable and immovable properties. Besides, Choksi faces attachment of his bank accounts and arrest. In its order passed in January 2022, the regulator imposed a penalty of Rs1.5 crore on Choksi and restrained him from the securities market for one year. Sebi had found that Choksi communicated UPSI to one Rakesh Girdharlal Gajera, who sold his entire shareholding of 5.75 per cent in Gitanjali Gems in December 2017 with the intention of avoiding loss ahead of any event which may lead to disclosure of fraudulent issuance of LoUs (letter of undertaking)to Gitanjali Group and its magnitude in public domain.
Hans India
17-05-2025
- Business
- Hans India
Another RBI dividend booster in sight
Mumbai: Economists expect the Reserve Bank of India's (RBI) dividend to the government to surpass a record over Rs2.5 lakh crore this year as the central bank earnings, through the sale of dollars to prop up the rupee as it sharply depreciated during 2024-25, are reported to have shot up. This higher profit will be transferred to the government as a dividend in 2025-26. The previous record dividend transferred to the government stands at Rs2.1 lakh crore during 2024-25, which helped to keep the fiscal deficit in check, while enabling the Finance Ministry to continue with its expenditure on big ticket infrastructure projects to spur growth and social welfare schemes to uplift the poor. This was a record jump from the Rs87,416 crore transferred to the government in 2023-24 for the profit made in 2022-23. Similarly, the government is expected to get another booster shot through the RBI dividend in the current financial year as well. 'Among the RBI's earnings, forex transactions are expected to be most significant in light of the in light of the central bank's measures to lower rupee volatility by strong dollar purchases earlier in fiscal 2025 and difference in the current versus historical exchange rate. Add to this the interest income on government securities and earnings from funds extended to banks in midst of previous tight liquidity. 'This transfer could amount to a record high at around Rs2.5-2.7 lakh crore this year,' said Radhika Rao, senior economist at DBS Bank. Earnings on forex transactions are expected to be substantial with gross dollar sales tracking at $371.6 billion in fiscal 2025 till February compared to $153 billion in fiscal 2024, according to Gaura Sengupta, chief economist at IDFC First bank. She estimates the RBI dividend to be between Rs2.6 lakh crore to Rs3 lakh crore, according to an NDTV Profit report. The higher dividend creates fiscal space of 0.1 per cent to 0.2 per cent of GDP, estimates Sengupta. With support from the higher-than-budgeted RBI surplus and savings on a few expenditure heads, the central government is in a fairly strong position to counter the growth slowdown risks and any potential emergency spending requirements.
