Financial crisis worsens as govt directs AGPR to 'stop' salaries

• Ministry also directed to stop clearings of attached departments until further notice.
• Ishaq Dar said: "It might be untrue."
• Salaries, pensions of defence-related institutions cleared for next month, sources said.

ISLAMABAD: Due to the current economic crunch and the country's deteriorating financial condition, the ministry of Finance and Revenue instructed Accountant General Pakistan Revenues (AGPR) to cease the clearing of bills, including salaries, The News reported on Saturday. 

The ministry also directed to halt the clearings of attached departments until further notice.

Official sources confirmed to The News on Friday night that the operational cost-related releases faced difficulties chiefly due to the economic hardships of the country.

Contacting Finance Division officials for a comment, the reporter was unable to receive any response. However, Minister for Finance Ishaq Dar was contacted for a comment. The minister said it might be untrue but promised to get back after confirming it. However, this correspondent did not get any reply till the filing of this report by 1am on Saturday.

Sources said that they went to the AGPR office for clearance of their outstanding bills but were informed that the Ministry of Finance had directed them to stop clearing all the bills, including the salaries, because of the prevailing difficult financial positions. 

The exact reasons could not be ascertained why the clearance of bills was stopped on an immediate basis.

The lingering financial difficulties could be cited as a major reason behind this move. The sources said the salaries and pensions of defence-related institutions had already been cleared for next month.

Ishaq Dar while meeting on February 22 with a delegation of M/s Rothschild & Co had said "the government was steering the economy towards stability and growth adding that "the government is committed to completing the International Monetary Fund (IMF) programme and fulfilling all international obligations."

Dar's commitment to unlocking the IMF tranche can be seen on February 20 when the National Assembly had unanimously approved the Finance (Supplementary) Bill 2023 or 'mini-budget' — a move mandatory for seeking the $1.1 billion tranche of the IMF.

The bill increases sales tax from 17 to 25% on imports ranging from cars and household appliances to chocolates and cosmetics. A general sales tax was raised from 17% to 18%.

"The prime minister will also unveil austerity measures in the next few days," the minister told the lower house of parliament as the bill was passed, adding "we will have to take difficult decisions".

‘Completely false’

The Ministry of Finance, in a clarification released in this regard, mentioned that there are rumours floating around that the government has instructed to stop payment of pay, pension, etc.

“This is completely false as no such instructions have been given by Finance Division, which is the concerned federal ministry,” the statement read.

The ministry further mentioned that the AGPR has confirmed that pay and pension have already been processed and will be paid on time. Meanwhile, other payments are being processed as per routine.