SRINAGAR: Finance Minister (FM) Haseeb Drabu today hit out at the previous regime for mishandling the provident fund of the State Government employees, saying it was a classic case of “Ponzi game”.
The Government has been utilising the net accruals on account of Provident Fund as captive resources to finance its day to day expenditure, Drabu said in his budget speech in the State assembly here.
“To make matters worse, instead of accounting what it had borrowed from its employees, the net general provident fund (GPF) was grossly understated in the budget so as to get a higher allocation of market borrowings. This fiscal hara-kiri has been committed year after year for the last 30 years or so.
“With no cash in the PF kitty, the outflows which get crystallized year after year, are being paid from current inflows. It is a classic version of what in financial circles is called a Ponzi game,” Drabu said.
The finance minister warned if the changes to the accounting system were not affected now, the State Government may not be in a position to pay out the provident fund to the employees. (AGENCIES)
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from Daily Excelsior http://ift.tt/1TR90Df
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