Selling the
family silver
The federal
cabinet in its wisdom has decided on March 19, 2019 to sell properties and
assets of federal ministries and their allied departments that were not in use,
run down, or abandoned. For the cash-strapped government, this appears as a
droolingly tempting proposition to enhance its revenues, an issue currently
generating more heat than light because of the Federal Bureau of Revenue (FBR) appearing
likely to miss its annual target by a whopping figure and the resultant
draconian measures such as raids on businesses being conducted by the FBR
minions. Whether these methods of FBR will prove productive for government
revenues however, remains a moot point. To return to the federal cabinet
decision though, one hopes the idea has been thought through and does not
suffer the same fate as the Quixotic idea floated early in the Pakistan
Tehreek-i-Insaaf (PTI) government’s tenure to turn the Prime Minister’s House
in Islamabad into a university and the Governor’s Houses in the provincial
capitals into some other public use. The first sank quietly without a trace
when security, functionality and the impracticality of the idealist idea came
to the fore. The latter remains confined to opening the Governor’s Houses to
visits from the public and not much else, not a bad idea per se but reflective
of a sobering return to reality. The auction of milk-giving buffaloes and
vehicles of the Prime Minister’s House too did not live up to the initial hype.
The possible gain from selling off disposable federal properties and assets of
the federal government may run into trillions. Prime Minister Imran Khan,
according to Information Minister Fawad Chaudhry, has sought lists of such
properties for disposal, and these have been duly supplied by the concerned
ministries to the federal cabinet. When asked how the government could sell its
assets without adopting a proper liquidation process, Fawad Chaudhry evaded the
answer by saying the government would first adopt a uniform policy to frame a
modus operandi for legal disposal of such properties as every public organisation
has its own procedure for this purpose, which may hamper the government’s plan.
What the
information minister did not say (if, that is, he is aware of the fact) is that
apart from the federal capital Islamabad, the rest of the federal government’s
properties are located in the provinces. The land on which they sit is
originally provincial land, leased virtually in perpetuity to the federal
government. In the event that the federal government proceeds, after adopting
its ‘uniform’ policy and modus operandi, to attempt to sell off derelict,
abandoned or not in use such properties, many anomalies are likely to arise. In
the first place, the respective provincial governments would be perfectly
within their rights to demand of the federal government a return of the land
(and the properties standing on them) to the original owners, i.e. the
provincial governments, and insist on pocketing 100 percent of the proceeds of
sale. Such an outcome would obviously defeat the revenue generation aspiration
of the federal government. Even if, in the event the provincial governments
agree to share the sales proceeds with their beleaguered federal counterpart,
they could virtually dictate such shares between Islamabad and the provincial
capitals, implying less proceeds to the former than it may have envisaged. Last
but not least, there is a logical inconsistency at the heart of the whole idea.
Any such sale for revenue generation purposes, even if it were able to overcome
the roadblocks outlined above, would inherently be a one-off affair. The
proceeds may well ‘disappear’ into the treasury’s coffers to finance current
expenditures without any possibility of ever again being able to repeat such a
venture. This is akin to selling the family silver without a clue what will
happen in the future when it is gone.
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