Government in dock over Rs 150 billion DSC holders' dues
ISLAMABAD (May 31 2007): The government is in the dock over the payment of Rs 150 billion to defence savings certificates holders as it has no visible resources for such a huge payment in the current fiscal year, it was learnt here on Wednesday. The payment on defence certificates issued in 1995-96 for 10 years was due in 2006-07, but the government's economic managers had no idea about it.
They were jubilant over the rise in the economy as it confirmed their claim of economic boost besides surge in foreign exchange reserves that helped them absorb big shocks such as deadly earthquake in 2005 and high oil prices for a long period without any problem.
But one fine morning their taste got sour when they came to know that they were to make payment of over Rs 150 billion on maturity of defence savings certificates. The missing link between the budgetary provisions and the payments to defence certificates holders indicates that the policy makers were totally unaware that such a huge payment was due in the current fiscal year.
If they had even the slightest idea, they would have made a provision in the outgoing fiscal year's budgetary provisions. Ignorance of the payments due, that too of Rs 150 billion on maturing of defence certificates shows how seriously the government economic managers manage the economic affairs of the state. It is also indicative of ad hocism in the national economy.
Defence certificates were issued during the second tenure of Nawaz Sharif--1995-96 to1998-99--and their maturity will keep on haunting the government as it needs between Rs 150 billion and Rs 175 billion till 2008-09.
Interestingly, the government is blind to the issue. Neither the Finance Ministry nor the Central Directorate of National Savings has the exact data on defence certificates issued from 1995-96 to 1998-9. They are also in bewilderness on the size of the defence certificates which have been enchased prematurely.
Sources said a number of meetings have been held to get out of this mess. The Finance Ministry and Central Directorate of National Savings officials have clearly mentioned that in more than one meeting the government had no mechanism to check the exact number of defence certificates encashed by the holders before maturity.
However, Finance Secretary Tanwir Ali Agha guessed at one of the meetings that 40 to 45 percent defence certificates might have been encashed by the holders before reaching maturity date and now only payments of the rest 55 to 60 percent were due.
But his words were only a guess that may be correct or otherwise. Sources said a number of options were under consideration to resolve the issue in a way that it does not add to government woes and one of them was rolling over half of the holders of defence certificates at the current saving rates.
http://www.brecorder.com/index.php?id=570865&currPageNo=1&query=&search=&term=&supDate=
ISLAMABAD (May 31 2007): The government is in the dock over the payment of Rs 150 billion to defence savings certificates holders as it has no visible resources for such a huge payment in the current fiscal year, it was learnt here on Wednesday. The payment on defence certificates issued in 1995-96 for 10 years was due in 2006-07, but the government's economic managers had no idea about it.
They were jubilant over the rise in the economy as it confirmed their claim of economic boost besides surge in foreign exchange reserves that helped them absorb big shocks such as deadly earthquake in 2005 and high oil prices for a long period without any problem.
But one fine morning their taste got sour when they came to know that they were to make payment of over Rs 150 billion on maturity of defence savings certificates. The missing link between the budgetary provisions and the payments to defence certificates holders indicates that the policy makers were totally unaware that such a huge payment was due in the current fiscal year.
If they had even the slightest idea, they would have made a provision in the outgoing fiscal year's budgetary provisions. Ignorance of the payments due, that too of Rs 150 billion on maturing of defence certificates shows how seriously the government economic managers manage the economic affairs of the state. It is also indicative of ad hocism in the national economy.
Defence certificates were issued during the second tenure of Nawaz Sharif--1995-96 to1998-99--and their maturity will keep on haunting the government as it needs between Rs 150 billion and Rs 175 billion till 2008-09.
Interestingly, the government is blind to the issue. Neither the Finance Ministry nor the Central Directorate of National Savings has the exact data on defence certificates issued from 1995-96 to 1998-9. They are also in bewilderness on the size of the defence certificates which have been enchased prematurely.
Sources said a number of meetings have been held to get out of this mess. The Finance Ministry and Central Directorate of National Savings officials have clearly mentioned that in more than one meeting the government had no mechanism to check the exact number of defence certificates encashed by the holders before maturity.
However, Finance Secretary Tanwir Ali Agha guessed at one of the meetings that 40 to 45 percent defence certificates might have been encashed by the holders before reaching maturity date and now only payments of the rest 55 to 60 percent were due.
But his words were only a guess that may be correct or otherwise. Sources said a number of options were under consideration to resolve the issue in a way that it does not add to government woes and one of them was rolling over half of the holders of defence certificates at the current saving rates.
http://www.brecorder.com/index.php?id=570865&currPageNo=1&query=&search=&term=&supDate=
