Geisha Kow­lessar

Even though at least 60 per cent of ex­cess rev­enues were an­nu­al­ly trans­ferred in­to the Her­itage and Sta­bil­i­sa­tion Fund (HSF), Cen­tral Bank Gov­er­nor Ewart Williams ad­mit­ted to a lack of clar­i­ty in the leg­is­la­tion gov­ern­ing the meth­ods used to al­lo­cate mon­ey to the fund. Williams said so in re­sponse to a ques­tion raised by Vas­ant Bharath, a mem­ber of the Pub­lic Ac­counts Com­mit­tee and Food Pro­duc­tion Min­is­ter, at Tues­day's ex­am­i­na­tion of the HSF fi­nan­cial state­ments for the year end­ed Sep­tem­ber 30, 2008.

Say­ing the is­sue was raised on three con­sec­u­tive oc­ca­sions, Bharath said: "This is a long-stand­ing is­sue which is the po­si­tion that seems to be at odds with re­gard to ac­count­ing for the ex­cess that goes in­to the fund on a quar­ter­ly ba­sis as op­posed to an an­nu­al ba­sis." Stat­ing to the Gov­er­nor, HSF ex­ec­u­tives and oth­er Cen­tral Bank of­fi­cials that this has "con­tin­u­al­ly cre­at­ed" a sit­u­a­tion for the Au­di­tor Gen­er­al, Bharath asked whether the HSF had tak­en any steps to ob­tain le­gal ad­vice on this mat­ter.

"Be­cause clear­ly, de­pend­ing on how you ac­count for those funds, you could ac­tu­al­ly be putting less than you ought to be do­ing, so that the re­sults at the end of the year or when you do ac­count, may ac­tu­al­ly be less," Bharath said. In re­sponse, Williams said: "We have got le­gal ad­vice and es­sen­tial­ly the ad­vice was that we should seek to clar­i­fy these reg­u­la­tions.

"We have made these rep­re­sen­ta­tions to the Min­istry of Fi­nance...It was not con­ve­nient to take that to Par­lia­ment or to pur­sue the amend­ment," he said. "The de­ci­sion was tak­en to pur­sue the amend­ment along with oth­er amend­ments at the time of the re­view of the leg­is­la­tion, which comes up, af­ter five years, in March or April of 2012.

"The un­der­ly­ing ra­tio­nale of the leg­is­la­tion was ad­hered to...There is some in­con­sis­ten­cy or lack of clar­i­ty in­side the (HSF) Act." In ac­knowl­edg­ing to Bharath the lack of clar­i­ty in the leg­is­la­tion, Williams said the un­der­ly­ing ob­jec­tive of the HSF had been ad­hered to to the ex­tent that at least, in each year, 60 per cent of the ex­cess had been ac­cu­mu­la­tive­ly put in.

"In fact, if I may clar­i­fy, the fund would have al­lowed a draw­down in one year, in 2009-2010, be­cause there was a short­fall in ac­tu­al rev­enues com­pared to ex­pect­ed rev­enues. "And the Gov­ern­ment de­cid­ed not to draw down. "The un­der­ly­ing ra­tio­nale of the fund has been ad­hered to...But the amend­ment is re­quired and the plan is to do it in the con­text of the re­view when the time comes in March or April."