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Express Tribune
15 hours ago
- Business
- Express Tribune
Govt admits poor SOE governance
The government's fiscal support to SOEs – through grants, subsidies, loans and other injections – exceeded Rs600 billion in six months, equivalent to nearly 10% of total revenue receipts. photo: FILE Listen to article In a rare statement, a cabinet body on Friday admitted that poor governance concerns persisted with low transparency in government-owned companies while their cumulative losses increased further to a record Rs5.9 trillion by December last year. The statement issued by the Ministry of Finance after a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs) appeared to be a serious charge sheet about the poor performance of SOEs during the July-December 2024 period of the current fiscal year, particularly the power sector performance. The energy-sector circular debt, comprising power and gas, jumped to Rs4.9 trillion by December last year. "Governance concerns persist, with low levels of transparency in beneficial interest disclosures under Section 30 (of the SOEs Act) and other compliance gaps," stated the Ministry of Finance. Finance Minister Muhammad Aurangzeb chaired the meeting. The statement added that "the lack of strategic alignment in business plans and operational inefficiencies across SOEs were identified as critical areas requiring urgent reforms". Muhammad Aurangzeb reaffirmed the government's commitment to strengthening the governance, operational efficiency and financial sustainability of key public sector entities, it said. The finance minister stressed the importance of aligning business plans with national priorities and addressing operational challenges in a timely and coordinated manner. The cabinet committee reviewed the performance of government entities during the first half of current fiscal year, which also coincided with the first year of the government of Prime Minister Shehbaz Sharif. "The cabinet committee noted with concern the staggering cumulative losses of SOEs amounting to Rs5.8 trillion," said the finance ministry. It added that Rs342 billion in additional losses were incurred in just the last six months - equating to a daily loss of Rs1.9 billion. Aurangzeb "emphasised that issues such as inefficiencies in DISCOs' (distribution companies) operations, slow network upgrades by National Transmission and Despatch Company, unfunded pension liabilities and low governance standards continue to erode fiscal space and undermine investor confidence". The finance minister stressed the importance of timely reforms, particularly in power and energy sectors, where circular debt has crossed Rs4.9 trillion, it added. The government reiterated the resolve to bring greater transparency, financial discipline and accountability to the SOE landscape. The finance ministry said that the Central Monitoring Unit gave a detailed briefing on a biannual report on the federal SOE performance covering the period from July to December 2024. The report included a detailed overview of the state of affairs and key challenges confronting state-owned enterprises, including cumulative losses amounting to Rs5.8 trillion, with Rs342 billion being incurred in just six months. The committee was told that circular debt in oil, gas and power sectors crossed Rs4.9 trillion, severely affecting cash flows and asset valuations. The government's fiscal support to SOEs – through grants, subsidies, loans and other injections – also exceeded Rs600 billion in six months, equivalent to nearly 10% of total revenue receipts. In addition, unfunded pension liabilities in DISCOs and other SOEs, estimated at Rs1.7 trillion, remain off the books, as in the case of railways' pension obligations, the meeting was told. It was highlighted that government guarantees currently stood at Rs2.2 trillion, while rollover costs and financial restructuring liabilities further compound fiscal pressures. The finance minister emphasised that directors representing the government on boards of SOEs must exercise due diligence and play an active role in safeguarding the financial health and operational performance of the entities through informed and responsible input. In a recent meeting of the National Assembly Standing Committee on Finance, Muhammad Aurangzeb said that government nominees on SOE boards were performing below requirements and they needed to pull their socks up. The cabinet committee also approved new nominees on various boards. It approved the appointment of chairman of the Quetta Electric Supply Company (Qesco) board, constitution of the board of directors of the Independent System Market Operator, appointment of independent director/chairman on the board of Gujranwala Electric Power Company (Gepco) and independent director on Genco Holding Company Limited (GHCL). It approved the nomination of independent directors on the board of Multan Electric Power Company (Mepco), Power Information Technology Company and the constitution of the board of Energy Infrastructure Development and Management Company. The cabinet body approved the winding up of three subsidiaries of the Ministry of Railways, which included RAILCOP, PRACS and PRFTC.
Business Recorder
5 days ago
- Business
- Business Recorder
Researchers & teachers: FAPUASA, PUASA condemn govt's decision to revoke tax rebate
LAHORE: The Federation of All Pakistan Universities Academic Staff Association (FAPUASA) Punjab Chapter and the Punjab University Academic Staff Association (PUASA) held a joint press conference at the University Club Committee Room on Monday strongly condemning the federal government's decision to revoke the longstanding tax rebate for researchers and teachers. The associations called upon Punjab Chief Minister Maryam Nawaz to immediately increase budgetary allocations for the province's universities to mitigate the financial crisis in higher education. The press conference was chaired by PU ASA President and former FAPUASA President Prof Dr Amjad Abbas Khan Magsi. Other prominent attendees included FAPUASA Balochistan President Prof Dr Kaleem Ullah Bareach, FAPUASA Punjab President and PU ASA Secretary Dr Muhammad Islam, PU ASA Vice President Dr Ghalib Atta, and GCU ASA President Prof Dr Noman Aftab. The academic leaders expressed deep concern over the inadequate funding and tax-related challenges faced by Punjab's universities. Dr Amjad Magsi highlighted the disparity in financial support, stating that Punjab, despite being the largest province with 51 universities, has been allocated only Rs18 billion as a recurring grant. In contrast, Sindh, with 32 universities, receives more than double that amount at Rs42 billion. The speakers demanded an urgent revision of the recurring grants for Punjab's public sector universities to ensure equitable resource distribution. The tax rebate, initially introduced at 75% during General Musharraf's government in 2006 to encourage research and retain academic talent, was reduced to 40% by the PML-N government in 2013. Now, the current administration has decided to abolish it entirely, a move that reflects a persistent neglect of the academic community. The rebate was not a privilege but a necessity for university faculty and researchers who often bear out-of-pocket expenses for journal publications, research materials, fieldwork, and academic travel. Its removal is expected to demoralize scholars, reduce research output, and exacerbate brain drain, ultimately undermining Pakistan's academic progress. This decision comes amid a severe financial crisis in higher education. Despite the federal budget expanding from Rs5.9 trillion in 2018 to Rs17.5 trillion in 2025 — a 196% increase — the recurring grant for higher education has remained stagnant at Rs65 billion. Meanwhile, the number of public universities has risen from 126 to 160, with operating costs, salaries, pensions, and utility expenses surging significantly. According to the Economic Survey of Pakistan, the country allocates a mere 0.8% of its GDP to education, with only 0.37% dedicated to higher education in the current fiscal year. This falls drastically short of UNESCO's recommended 4–6% and lags behind regional counterparts like India and Bangladesh. Notably, both PML-N and PPP had pledged in their election manifestos to raise education spending to 4% of GDP but have failed to fulfil this commitment while in power. The academic leaders urged the Punjab government to take immediate action to safeguard the future of higher education in the province, emphasizing that continued neglect would have long-term detrimental effects on research, innovation, and national development. Copyright Business Recorder, 2025
Express Tribune
5 days ago
- Business
- Express Tribune
Varsity employees demand budget hike
The Federation of All Pakistan Academic Staff Association (FAPUASA) has demanded and increase in the budgetary allocations for the varsities in Punjab and criticized the federal government's decision to revoke a 25 per cent tax rebate for researchers and teachers. Addressing a press conference at Punjab University, leaders of FAPUASA and the PU Academic Staff Association leaders expressed concern over meagre funding for the universities and the revocation of the tax relief. Former FAPUASA president Dr Amjad Abbas Magsi said that despite being the largest province with the highest number of universities, Punjab government has allocated only Rs18 billion as recurring grant for its 51 universities, while 32 institutions in Sindh have been allocated Rs42 billion. The leaders demanded increase in the allocation of grants for the public sector universities in Punjab. They said 75 per cent income tax rebate introduced in 2006 was aimed at promoting research and academic retention. It was reduced to 40% in 2013 and now the government was abolishing it. They said the rebate was a lifeline for university faculty and researchers who routinely pay out of their pockets for journal publication fees, fieldwork and academic travel. Its abolition will demoralise scholars, reduce research productivity and accelerate the brain drain. The university employees' leaders said that despite the federal budget growing from Rs5.9 trillion in 2018 to Rs17.5 trillion this year, the grant for higher education has remained frozen at Rs65 billion.
