LAHORE: Punjab’s caretaker Finance Minister Zia Haider Rizvi on Wednesday said the government was facing a cash flow crunch due to outstanding payments of over Rs71 billion under various heads.
Mr Rizvi said its prime concern was to ensure timely release of salaries of government employees and the reason for this cash flow crisis was put on the slow disbursement of funds on account of provincial share in the National Finance Commission (NFC) award by the federal government, reported an English daily.
Aside from the NFC award, Punjab Revenue Authority (PRA) is also facing a shortfall due to the apex court’s verdict to suspend tax collection on telecommunication services, which was contributing to the financial crisis.
Mr Rizvi said the Finance Department expected some cheques/instruments would remain unpaid this year.
Punjab’s caretaker finance minister has instructed the finance department to give priority to payment of salaries as per orders of the apex court.
And second, on the list is being given to claims of less than Rs5 million to help the most number of people with comparatively slower cash flow.
Third on the list are those where payments are over Rs5 million.
Mr Rizvi said, “the government of Punjab had issued an advice to the State Bank of Pakistan for making payments in accordance with the above priorities and instructing all banks concerned to stay open on June 30th.”
In accordance with directives of the interim Punjab chief minister, Rizvi sent a letter to the federal finance minister asking for disbursement of the withheld share of the province, which was also highlighted during a meeting in Islamabad.
Several cheques and instruments issued by various departments of the Punjab government and payments made on June 30th, 2018 remained pending due to various reasons.
Punjab’s caretaker finance minister highlighted provinces were majorly reliant on their respective share in the federal divisible pool as per the NFC formula.
The provincial government prepared the budget hinging on the federal government to release its NFC share. However, the federal government failed to gather the promised amount causing a deficit of Rs136 billion.
From it, Rs44 billion was released in the first week of this month, said Mr Rizvi.
Contrary to the Punjab government’s directives to make payments on June 30th, the central bank didn’t permit it on the order of the federal government.
The interim Punjab finance minister said this resulted in non-payments of many cheques and the issue was being taken up with both the federal government and SBP.
