Nov 18, 2018

Budget: Treasury in a catch -22 situation Featured

The Treasury has been pushed into a catch-22 situation relating to the 2019 budgetary process following three weeks of political uncertainty without clear direction.

The 2015 history is going to be repeated once again, as the Finance Ministry officials have been compelled to prepare a 3-month vote on account under the present situation of political instability, a senior Treasury official disclosed.

If the political impasse continues further without a settlement for few more weeks, then the Finance Ministry has to consider another option, he said.

A vote on account will have to be presented in Parliament in January 2019 to implement special measures to provide relief to the people, similar to action taken under the 100-day programme of good governance government in 2015, he added.

If this move is defeated in Parliament, the President has powers under the Constitution to sanction payments for public services including salaries of public sector employees and the general election expenditure withdrawing money from the government consolidated fund for three months, the official said.

However under the present volatile political environment, anything is possible, he said emphasising that this is a terrible experience for public servants.

According to Treasury statistics, the Consolidated Fund has been overspent to the tune of around Rs. 250 billion at present.

No money from state institutions including state owned enterprises is forthcoming to the fund and the Treasury cannot resort to borrowings to swell the Consolidated Fund, he revealed adding that the sudden dissolution of parliament without passing a vote on account has pushed the country into a financial crisis.