Secretary Finance Dr Waqar Masood on Friday said that provinces could not take loans from foreign sources without obtaining non-objection certificate (NOC) from the federal government.
Briefing the Senate Standing Committee on Finance and Revenue, Secretary Finance informed that provinces could not take foreign loans directly, as they need to take NOC from the federal government. The international financial institutions and foreign countries provide loans to the provinces on the guarantee of the federal government, he added. Similarly, the provinces repaid their loans to the foreign banks/ countries through the federal government.
Waqar Masood said that federal government monitor the projects of the provinces financed through foreign resources. The committee directed to further improve the monitoring system of the loans. Secretary Finance told the committee that provinces could utilise their resources by their own, as according to the constitution federal government could not interfere in it.
The Senate Standing Committee on Finance and Revenue met under the chair of Senator Nasreen Jalil. Secretary Finance Dr Waqar Masood also gave briefing to the committee on the assistance provided to internally displace persons, as he said federal government has provided Rs 6 billion for IDPs. He added that government has disbursed Rs3 billion as cash and provided same amount of wheat. Prime Minister Mohammad Nawaz Sharif has directed to provide maximum facilities to the IDPs, therefore, the Finance Ministry has provided Rs6 billion to them, remarked the Secretary.
The Committee reviewed the World Bank's loan given for agriculture sector of the county. Secretary Economic Affairs Division Saleem Sethi informed that government has taken World Bank loan for four projects of the agriculture wherein three projects are continued and fourth is in the pipeline. Giving further details, he informed that irrigation project in Punjab was initiated with total cost of $423 million in 2012, which would be completed in 2018. As many $87.2 million has spent on this project so far, he added.
Secretary EAD further informed that Executive Committee of the National Economic Council (ECNEC) in 2007 had approved various small projects for improving irrigation system in Balochistan with total cost of Rs 1500 million. These projects would be completed by the end of ongoing year 2014. He told the committee that different project for improving water sector in Sindh was started in 2007 with the cost of $175 million approved by the World Bank. However, the committee members showed reservations over the projects of Sindh, as they alleged that no such project has been initiated in the province.