Pakistan Economy - News & Updates - Archive

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Removal of 15pc GST on IT industry urged ​

Thursday, May 22, 2008

ISLAMABAD: Manawar Iqbal, president of the Pakistan Computer Association (PCA), has said the information technology industry was under pressure due to imposition of 15 per4 cent GST in the previous budget and appealed to the government to remove the tax for the promotion of industry in the country.

He was speaking at the specially convened executive body meeting of the association here on Wednesday. “The growth of the industry has already shown tremendous and unprecedented decline which is a bad omen for the future of the industry and economy of the country as well”, he said.

The meeting unanimously urged the Federal Minister for Finance, Syed Navid Qamar, to look into the affair and gravity of the situation.

Iqbal said the price of computer and its accessories had been increased almost 30 per cent.

He said as a result of the unfavourable business conditions, 20 per cent players of the industry had left the business and the rest were struggling while hoping for positive steps form the new government.

Removal of 15pc GST on IT industry urged

 

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EC, ILO to spend Rs535m to combat child labour ​

Thursday, May 22, 2008

ISLAMABAD: The European Commission (EC), and the International Labour Organisation (ILO) join together to support Pakistan’s efforts in combating abusive child labour in line with its National Policy and the Medium-term Plan on Combating Worst Forms of Child Labour (2008-16).

In this regard, a sum of Rs545 million (Euro 5,197,900) is pledged to finance a 5-year long project that focuses on children working in hazardous occupations under the most intolerable conditions ranging from exposure to chemicals and other harmful substances to long tedious working hours. The project will cover all hazardous sectors and occupations identified. The project will initially be implemented in selected districts of NWFP and Sindh.

The Project “Combating Abusive Child Labour II” is aimed at (i) promoting and replicating the “District Model” that has proven successful under on-going child labour projects in the target districts and beyond; (ii) institutional strengthening at the district, provincial and federal level through the enhancement of capacity of respective child labour units and the establishment of a child labour monitoring and referral system; and (iii) enhancing the child labour knowledge base through the conduct of a second National Child Labour Survey and related research studies, and the promotion, development and adoption of pro-child policies and legislative framework.

A Contribution Agreement was signed on Wednesday between the European Commission and the ILO in the presence of Syed Khursheed Ahmed Shah, Minister for Labour, Manpower and Overseas Pakistanis and Malik Asif Hayat Secretary Labour. Ambassador of the European Commission Delegation to Pakistan Jan de Kok and Country Director, ILO-Islamabad Donglin Li signed the agreement.

This has been signed to implement the Financing Agreement between the European Community and the Islamic Republic of Pakistan, signed in December 2006 and later amended in February 2008.

EC, ILO to spend Rs535m to combat child labour

 

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USAID marks closing of $11.3m PISDAC​

ISLAMABAD, May 21: The United States Agency for International Development (USAID) on Wednesday marked the closing of its four-year $11.3 million Pakistan Initiative for Strategic Development and Competitiveness project (PISDAC) after registering what it called significant achievements.

To mark this event, USAID-PISDAC organised a daylong conference on “Sharing best practices and lessons learnt for creating value together”.

Dr Warren Weinstein, chief of Party, JE Austin, Kevin Murphy, president and CEO JE Austin and acting director USAID Edward Birgells also spoke on the occasion.

The ceremony was attended by manufacturers, exporters, academics, and others that had participated in the project.

Strategy working groups focused on sectors, including gems and jewellery, marble and granite, dairy, furniture, surgical instruments and medical devices, and horticulture.

Kevin Murphy, on the occasion, provided an overview of a framework for building national competitiveness, which represents the latest thinking, followed by how PISDAC projects fit into this overall framework. Speaking on the occasion Edward Birgells said that providing economic opportunities for all Pakistanis was fundamental in building a solid and sustainable foundation for continued economic growth, prosperity, and peace.

“Business leaders working through the USAID-PISDAC programme have already made significant achievements by working with each other to improve their products, increase their exports, and develop a more qualified workforce,” he remarked.

USAID marks closing of $11.3m PISDAC -DAWN - Business; May 22, 2008

 

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Govt likely to set 7% GDP growth target for 2008-09​

ISLAMABAD: The growth target of Gross Domestic Product (GDP) is likely to be set at around 7 percent for the forthcoming fiscal year 2008-09, a senior official at ministry of finance told Daily Times Wednesday.

Low base of GDP in the outgoing fiscal year 2007-08 would help government achieve around 7 percent GDP growth target easily in the next fiscal 2008-09 and it could be surpassed by improving growth in agriculture and manufacturing along with already growing services sector, explained the official.

The GDP has witnessed growth of 5.7 percent against target of 7.2 percent during the current fiscal year, mainly due to significant decline in agriculture, manufacturing sectors and other deteriorating economic indicators like exports, foreign direct investment, portfolio investment, federal tax collection, and electricity, gas shortages.

According to the official, the government has decided to make agriculture and manufacturing sector as basis of economic growth to achieve higher GDP growth.

Keeping in view this decision, the government is aiming at fixing agriculture growth target at 5 percent for the next fiscal year 2008-09 as compared to the actual growth of 1.7 percent realised, missing annual target of 4.8 percent for the current fiscal year 2007-08, the official disclosed.

Manufacturing and large scale manufacturing targets would also be set at higher side for next fiscal year 2008-09, informed the sources.

Explaining agriculture and manufacturing sectors as main engine for realising higher GDP growth of 7 percent in the next fiscal year 2008-09, the official said that increased agriculture out put especially of wheat, cotton and rice would not only help meet local population’s and industrial demand but will also help boost exports.

In the agriculture sector, improved cotton production would help ensure availability of raw cotton on reasonable rates for the ginning industry as well as for the textile industry to increase production and ensure enhanced exports of textile products, explained the official.

Increased wheat, rice and sugarcane production would help related industries to increase production of wheat flour for local consumption as well as for exports.

To enable agriculture sector contribute as per requirement in the GDP, the federal government is set to announce higher allocations for the development of agriculture sector and other fiscal incentives like tax and duty free import of agriculture machinery, implements in the budget 2007-08.

The manufacturing sector would be facilitated in the budget 2008-09 to contribute more in the GDP by allowing duty free import of machinery, plants, other capital goods for setting up of export oriented industries in Export Processing Zones of the country.

According to the official, incentives for agriculture and manufacturing sectors would not only help higher GDP growth rate but would also create job opportunities in rural as well as industrial cities of the country. “It would have positive impact on efforts to reduce rural and urban poverty in years to come,” said the official. Services sector, which is greatly helping achieve reasonable growth in the last five years, would also be facilitated to continue its contribution in the GDP.

Daily Times - Leading News Resource of Pakistan

 

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TUSDEC to promote electronics industry​

LAHORE: Technology Upgradation and Skill Development Company (TUSDEC) is planning to set up Common Facility Centres (CFCs) in Lahore and Karachi to develop and promote country’s electronics industry.

According to spokesman of TUSDEC Wednesday, it aims to quickly reduce the multi-billion dollar imports of electronic and telecom gadgets and boost exports.

Pakistan is currently importing more than $1 billion worth of mobile phones annually to meet increasing demand for these gadgets commensurate with the growing tele-density in this part of the world.

Lahore Electronics Complex at a cost of Rs 2.7 billion would focus on the mobile phone and telecom sectors while Karachi Electronics Complex at a cost of Rs 3 billion would cater to the needs of Consumer and Home Appliance Industry including LCD (Liquid Crystal Display) TV, Computer Monitors and Multimedia Products.

The two centres are designed to support and help grow the local industry through ‘economy of scale’ supply of sub-assemblies and kits at competitive prices to those being otherwise imported from China and nearby countries.

The economy of scale supply will contribute significantly to lowering of cost of electronics products in Pakistan vis-a-vis other players in the international market.

Pakistan’s electronics sector basically focuses on consumer electronics, with activities confined to assembly of conventional TV sets, Radio, Cassette Recorders and other allied consumer electronics products using CKD or SKD component kits, imported mostly from China.

The share of electronics in country’s manufacturing sector is merely 3 percent. CFCs would provide industry with the much-needed help in supply of competitively priced and readily available parts, component kits, SKD and sub-assemblies including complete printed circuit solutions as well as expert services for product design and prototyping.

This will facilitate industry in the production of internationally competitive gadgets in terms of price and quality.

These centres will house modern electronics design and quality assurance labs besides equipped with hi-tech SMT machines for assembly of Printed Circuit Boards (PCBs) as well as high-volume through-hole automated assembly.

The major objective of the facilities would be to promote economic SMT in Pakistan by making it available as a common facility by providing contract assembly and a one-stop solution for local and export industry.

The centres would handle all the requirements of an electronics company’s printed circuit or motherboards for use in their final product. It would provide services such as PCB design, layout, fabrication and SMT assembly, he added, emphasizing that this would allow the clients to compete head-on with imported products in the domestic market. The availability of ‘Made in Pakistan’ products of the famous brands at competitive prices would substantially reduce the import bill.

Daily Times - Leading News Resource of Pakistan

 

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Govt likely to allocate Rs 119bn for Water & Power in PSDP​

ISLAMABAD: The government is likely to allocate over Rs 119 billion for the development of dams and increasing of power generation capacity to over come the existing power crises and ensuring water availability for agriculture in next fiscal year 2008-09, official sources confirmed.

However, the Annual Plan Coordination Committee (APCC), scheduled to meet on Friday (May 23), can change these allocation for further improvement. These are national importance projects and it is expected that the government might ensure maximum allocation for water and power related development programmes. As the country is facing severe load shedding and the new government is also claiming to over come the power short fall on emergency basis, it is expected that the APCC in its meeting might ensure provision of more funds for these schemes. Senior officials claimed that the APCC might provide extra funds about Rs 20 to Rs 30 billion from above the proposed Rs 119 billion for these projects.

The officials told Daily Times that Water and Power Division has demanded Rs 103.867 billion for new and ongoing various projects including dams. However, the priorities committee has recommended an amount of Rs 51.949 billion for the development of water sector in the next fiscal year. Similarly for power sector, the ministry demanded Rs 105.333 billion for meeting the ongoing severe power crises in the country. But the priorities committees in its meeting recommended Rs 67.056 billion for the improvement and development of power sector in the next fiscal year 2008-09.

In water sector, the expected total allocation for 64 on-going projects is Rs 51.949 billion while the ministry demanded Rs 93.550 billion in the Public Sector Development Programme for the year 2008-09. Maximum allocation has been made in these 64 projects for the construction of different major dams. Important projects among these are; Raising of Mangla Dam with allocation Rs 18 billion, Mirani Dam Rs 300 million, Resettlement Action Plan – Mirani Dam Rs 50 million, Sabakzai Dam Rs 120 million, Kurram Tangi Dam Rs 500 million, Satpara Multipurpose Dam Rs 100 million, Gomal Zam Dam Rs 2 billion, Greater Thal Canal (Phase-I) Rs 1.5 billion, Kachhi Canal (Phasep-I) Rs 8.5 billion, Rainee Canal (Phase-I) Rs 3 billion, Lower Indus Right Bank Irrigation and Drainage, Sindh Rs 2.5 billion, Balochistan Effluent Disposal in to RBOD (RBOD-III) Rs 1.2 billion, Revamping/rehabilitation of irrigation and drainage system of Sindh Rs 2 billion, and many others.

The federal allocation proposed by the priorities committee meets only the funding requirement of the ongoing projects, therefore, there is no allocation for 20 new projects of the power sector.

For power sector, the priorities committee has recommended Rs 67.049 billion for 40 on-going projects, and these are mainly related to power generation in the country. Some important major projects among these are; Khan-Khawar Hydro Power project, Shangla, Beshan, NWFP Rs 1.175 billion, Allai Khawar Hydro Power Project, Batagram, Besham NWFP Rs 2.535 billion, Dubir Khawar Hydro Power Project, Kohistan NWFP Rs 3.5 billion, Neelum Jhelum Hydropower Project AJK Rs 7.5 billion, 800MW Guddu Steam Power Project Rs 500 billion, 330MW Combined Cycle Dadu Power Rs 7.5 billion, 500MW Combined Cycle Power Plant at Chich Ki Malian Rs 5 billion, 425MW Combined Cycle Nandipur Power Plant Rs 5 billion, Muzaffargarh-Gatti 500 KV T/Line Rs 1 billion and many others.

Daily Times - Leading News Resource of Pakistan

 

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Rs 490 billion PSDP expected amid financial constraints​

ISLAMABAD: Keeping in view the financial constraints amidst unprecedented budget deficit, the government is set to propose Rs 490 billion Public Sector Development Programme for the fiscal year 2008-09, a senior official at Planning Commission confirmed Daily Times here Wednesday.

The proposed PSDP would include Rs 340 billion as federal development programme and Rs 150 billion as annual development programme of all the four provinces for the next fiscal year.

The former government had announced federal PSDP allocation of Rs 335 billion for the year 2007-08. However, due to the financial constraints the actual spending on federal development programme was recorded at Rs 194 billion during July-March of current fiscal year. The projections prepared by the Planning Commission suggest that the total federal PSDP spending would be around Rs 270 or Rs 275 billion by June 30 2008.

Official said the Priorities Committee proposed PSDP would be enhanced so as to finance government’s priority programme. For this purpose, the official said the Annual Plan Coordination Committee (APCC) meeting, to be held on 23rd and 24th of this month, would consider Rs 490 billion as over all size of the PSDP for the year 2008-09.

Among the total proposed PSDP of Rs 437 billion the federal component is Rs 340 billion for the year 2008-09. This is higher from current year utilised PSDP of Rs275 billion for the year 2007-08 by Rs65 billion showing 23.63 percent increase.

Priorities: A major emphasis in the proposed 2008-09 development programme is on the Infrastructure Development Sectors with an allocation of Rs 111.4 billion (38.8 percent of the total federal programme) while last year it was Rs 166.5 billion, Water Resources Development Rs 51.9 billion (18.1 percent) while last year it was Rs 63.5 billion, Transport and Communications Rs 43.5 billion (15 percent), Energy Rs 16 billion (6 percent) while last year it was Rs 34.1 billion.

Similarly the proposed allocation for social sectors and poverty related expenditure with an allocation of Rs 151.6 billion (52 percent) while last year it was Rs 156.2 billion. The allocation for strategic support to the Production Sectors including Agriculture, Industry and Mineral is Rs 24 billion (8.4 percent) while last year the allocation for this sector was 12.3 billion.

The Priorities Committee proposed PSDP is Rs 437 billion and its sub-components are:

All federal ministries and division Rs 188.9 billion, allocation for Special Areas (FATA, FANA, AJK, NA etc) is Rs 23.2 billion, allocation for any Special Programme by the federal government is Rs 26.5 billion, allocation for all Corporation including (Public Sector Enterprises) is Rs 48.4 billion and provinces PSDP is Rs 150 billion.

The senior official further said that the federal allocation proposed by the Priorities Committee meet only the funding requirement of the ongoing projects. To maintain the momentum of development and people’s expectation, the size of the PSDP would be enhanced to a reasonable level to make available fiscal space for new projects in line with government’s priorities, they maintained.

Daily Times - Leading News Resource of Pakistan

 

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Pakistan hikes interest rates to 12 pct​

Thursday May 22, 2008

Pakistan hikes interest rates to 12 percent in bid to counter inflation​

KARACHI, Pakistan (AP) -- Pakistan's central bank governor says the bank will raise interest rates by 1.5 percentage points to 12 percent to counter rising inflation and the falling value of the country's currency.
The spiraling cost of oil and other imported commodities is contributing to Pakistan's economic woes, which include large and growing fiscal and trade deficits.

State Bank of Pakistan governor Shamshad Akhtar said Thursday that inflation could cross the 11 percent mark by the end of the fiscal year on June 30.

She says it is "imperative to increase the real interest rate" now.

She says the rate hike will go into effect Friday.

The government's upcoming budget is expected to include unpopular cuts in spending as well as efforts to raise taxes.

Pakistan hikes interest rates to 12 pct: Financial News - Yahoo! Finance

 

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ILO To Help Pakistan Tackle Abusive Child Labour​

Friday, 23 May 2008
Press Release: United Nations

UN agency pledges to help Pakistan tackle abusive child labour practices
22 May 2008 - The United Nations International Labour Organization (ILO) has partnered with the European Commission (EC) for a five-year project to help Pakistan curb abusive child labour and take 10,000 children out of hazardous workplaces.

The 545 million Pakistani rupee, or €5.2 million Euro, scheme will focus on children working in conditions ranging from exposure to chemicals and other harmful substances to long, tedious working hours.

The "Combating Abusive Child Labour II" programme will be implemented by ILO, in cooperation with the Ministry of Labour and Manpower, provincial labour departments, employers and workers organizations, local governments, non-governmental organizations (NGOs), research institutions and the media, among others.

Donglin Li, the Director of ILO's Pakistan office, underscored his agency's commitment to curbing the worst forms of child labour by 2016 within the framework of the ILO Decent Work Agenda.

Scoop: ILO To Help Pakistan Tackle Abusive Child Labour

 

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Pakistan's forex reserves fall to $11.885 bln​

KARACHI, May 22 - Pakistan's foreign reserves fell by $322 million to $11.885 billion in the week that ended on May 17, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan fell to $9.500 billion from $9.847 billion a week earlier, while those held by commercial banks rose marginally to $2.385 billion from $2.360 billion.

Pakistan's foreign exchange reserves hit an all-time high of $16.486 billion on Oct. 31, 2007, but have fallen since then, partly because of outflows from the stock market after President Pervez Musharraf imposed emergency rule on Nov. 3.

The emergency was lifted on Dec. 15, but foreign investors remained cautious after the assassination of former prime minister Benazir Bhutto on Dec. 27.

The central bank on Thursday increased in its key discount rate to 12.0 percent from 10.5 percent, effective on May 23, to counter accelerating inflation and widening fiscal and current account deficits.

The central bank's Governor Shamshad Akhtar said this month foreign inflows of up to $3.5 billion were expected in the short- to medium-term, most of it in the form of loans from multilateral lenders and friendly governments.

On Thursday, the rupee closed at 69.25/45 to the dollar, near a record closing low of 69.60/90 set on May 19.

Pakistan's forex reserves fall to $11.885 bln - Yahoo! Malaysia News

 

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Pakistan and India come together over energy ​

22/ 05/ 2008

MOSCOW. (RIA Novosti political commentator Pyotr Goncharov) - The recent talks in Pakistan between Indian External Affairs Minister Pranab Mukherjee and his Pakistani counterpart Shah Mahmood Qureshi were more of a time-check for New Delhi and Islamabad than a full-scale attempt to normalize relations.

The topics announced by New Delhi for the talks were in the context of normalization, adjusted for the half a year break in dialogue caused by political instability, and indeed a complete change of government, in Pakistan.

The resumption of dialogue between the two neighbors several years ago suggested a mutual sounding out of positions on the most sensitive issues, such as measures to achieve peace, security, and trust; the disputed territories of Jammu and Kashmir; the fight against terrorism and drug trafficking; the free movement of people across borders, and development of economic and trade cooperation.

As the Indian financial paper the Economic Times admitted on the eve of the minister's visit to Pakistan, he also had to find out who determines Pakistani policy today. This is a far from academic question for India, considering that individual leaders have always exerted a major influence on bilateral relations.

It is clear that territorial disputes are the worst problem, and that they will not be resolved without compromise. Experience shows that those concessions do not necessarily have to be territorial, however. There are other options - it is possible to conduct referendums on a disputed territory, or give it a special status. In any event, the sides should look for new approaches to this problem, which at the moment are sadly lacking, except for rare initiatives from Islamabad.

India and Pakistan are trying to meet each other halfway. Terrorism, drug smuggling and porous borders are equally dangerous for social stability and security on both sides, and cooperation in resolving these problems is only natural. But they could do more, for instance by setting up joint commissions to deal with border control and exchange intelligence on terrorists and drugs.

Today, participation in three- and four-sided gas pipeline projects is a priority in bilateral relations. This applies to the Iran-Pakistan-India (IPI) project, and to the trans-Afghan Turkmenistan-Afghanistan-Pakistan-Indian pipeline.

The IPI project will cost an estimated $7.5 billion dollars and is scheduled to go into operation in 2013. The agreement to build it was reached only relatively recently - during Iranian President Mahmoud Ahmadinejad's whirlwind tour of Pakistan, Sri Lanka, and India in the end of April. The pipeline's rated capacity is 150 million cubic meters of gas per day; of these India will receive 90 million cubic meters, and Pakistan 60 million.

About the same time, Turkmenistan, Pakistan, Afghanistan and India signed a framework agreement to build the trans-Afghan gas pipeline. Construction on this 7.6 billion dollar project will get underway in 2010, and the first gas will be supplied in 2015.

Both Pakistan and India face serious energy shortages. That should encourage them to cooperate on both projects - and they will need to. IPI will be laid in Baluchistan, where permanent tensions and separatist sentiments could wreck the project. The project also faces intense opposition from the United States, which would like to see Iran in the grip of economic sanctions.

But American pressure to abandon the project could be neutralized by Russia's gas monopoly, Gazprom, which is equally determined to divert Iranian gas from the western market. It is no accident that Pakistani experts are increasingly talking about Russian-Pakistani regional cooperation in the oil-and-gas industry. They believe that Gazprom's participation will be good for the project.

On paper, the route of the trans-Afghan pipeline on Afghan territory is ideal, starting from the Turgundi terminal on the Turkmen-Afghan border, and following the Herat-Kandahar highway to Spin-Boldak, a terminal point at the Afghan-Pakistani border. But it is ideal only in peacetime. It is possible that by 2015 the United States, NATO, Afghanistan, and Pakistan could guarantee security of the pipeline. But at the moment they are in no position to do so.

RIA Novosti - Opinion & analysis - Pakistan and India come together over energy

 

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DFID to double its investment in NWFP ​

PESHAWAR (May 23 2008): The Department of International Development (DFID), a Britain based donor agency has announced to double its investment in Pakistan in the areas of health, education and administration. The head of the DFID in Pakistan, Eric Hawthorn said this during a meeting a with the Chief Minister (CM), NWFP, Ameer Haider Khan Hoti at the Chief Minister's Secretariat on Thursday.

He also assured the NWFP government of extending support in arranging a proposed donor conference scheduled in October this year. Besides the governance advisors and programme officers of DFID, the provincial chief secretary and chief economist were also present in the meeting.

Speaking on the occasion, Hoti said that provincial government was focusing on achieving a lasting peace in the entire province, which he termed a big hurdle in the way of ensuring good governance and resolving the problems of the people. Further, the CM maintained that bringing prudent reforms into health, education and other social sectors was the top priority of the incumbent provincial government.

Moreover, he thanked the DFID for its ongoing projects in the province saying that his government will extend its full co-operation to the officials of the DFID in this regard.

'Our people suffered huge losses in shape of damaged infrastructure of social and services sectors. Therefore the international donor agencies and other non-government organisations should come forward and help us rebuilt the damages', Hoti said.

The provincial government was committed to resolve the people's problems through best and judicious utilisation of the available resources, he added 'Sufficient funds will be given to raise the literacy ratio, promotion of quality education and upgradation of the hospitals in all the districts of the NWFP', Hoti declared and hailed the DFID for its future development plans in the province.

Business Recorder [Pakistan's First Financial Daily]

 

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Govt approves 2,200MW power generation projects​

LAHORE: Federal Government has approved several projects of power generation for execution on fast track basis to generate additional 2200 megawatts electricity to the national grid within one year.

In order to bridge the gap between generation and consumption, all resources are being tapped with a view to enhance power generation capacity in the country, managing director of Pakistan Electric Power Company (PEPCO), Fazal Ahmed Khan said Thursday.

Addressing the 3rd Senior Management Course delegation of the National Management College, he apprised that the contracts for setting up of 425 MW Nandipur and 525 MW Chichoki Mallian thermal power projects have already been signed.

The two projects, being executed in public sector, are expected to be completed in 2010 and 2011 respectively. Besides, 1800 MW electricity would also be added to the national grid through private sector in 2008-10, he said.

Mr Khan said the system losses of PEPCO were reduced to 20.6 percent till the end of April during the current fiscal year. He said the number of PEPCO consumers were likely to reach 18 million by the end of June 2008.

He said WAPDA/PEPCO receivables have swelled to Rs 187.753 billion including a sum of Rs 72.060 billion owed by FATA and Rs 38.775 billion by KESC.

WAPDA general manager (Technical Services) Dr Izhar-ul-Haq briefed the delegation about the hydropower and water sectors. He said Pakistan has the potential of generating more than 54000 MW low-cost hydropower.

The delegation was told that per capita water availability in Pakistan has reduced to an alarming figure of 1070 cubic meter in 2007. It was further told that the country has already lost the storage capacity equivalent to 5.13 MAF due to silting in the reservoirs of Tarbela, Mangla and Chashma.

To cope with the increasing needs in water as well as power sector, the construction of large dams has become all the more inevitable, he concluded.

WAPDA Member (Finance) Chaudhry Abdul Qadeer and the senior officers of WAPDA and PEPCO were also present on the occasion.

Daily Times - Leading News Resource of Pakistan

 

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Federal ministries demandRs 604bn in upcoming PSDP​

ISLAMABAD: The Federal ministries and divisions have placed a demand of Rs 604.661 billion in PSDP for ongoing as well as new development projects for the fiscal year 2008-09, however, due to the fiscal constraints an allocation of Rs 340 billion is likely to be approved during Annual Plan Coordination Committee (APCC) meeting Friday (today).

Savings to the tune of Rs 160 billion from current fiscal year’s PSDP would help the present government to allocate Rs 340 billion for the next year’s federal PSDP. Projects which were unable to start till December 2007 were grounded by the then government and no further allocation was made for such projects during January-May period of current fiscal year 2007-08.

APCC would propose its final recommendations for the development projects of the federal ministries and divisions to the National Economic Council (NEC) that would start deliberations here in a two days meeting to be chaired by Salman Farooqi, Federal Minister for Planning and Development and Deputy Chairman Planning Commission.

“New elected government, which is faced with a huge economic imbalance due to unprecedented budget deficit of Rs 957 billion in the current fiscal year 2007-08, is trying to keep the development process intact within available financial resources,” said an official at Planning Commission.

According to official estimates available with Daily Times, federal ministries have demanded the government to provide Rs 50 billion for launching four special programmes for the poor, however, the priorities committee for the next fiscal has recommended an allocation of Rs 26.745 billion. Special programmes include, Khushal Pakistan Programme (KPP-1) Rs 4.420 billion, Khushal Pakistan Programme (KPP-2) Rs 17 billion, Rs 5 billion for creation of Khushal Pakistan Fund and Rs 325 million for establishment of Competitive Support Fund.

Ministry of Water and Power has sought Rs 103.867 billion for water sector development and Rs 105.333 billion for the development of power sector for the next fiscal year. Priorities Committee has recommend the APCC to allocate Rs 51.949 billion for water sector and Rs 67.058 billion for Power sector development in 2008-09. Pakistan Atomic Energy Commission has sought Rs 22.251 billion, however, the Priorities Committee has recommended provision of Rs 15.301 billion.

Defence Division has placed a demand of Rs 17.415 billion for the next fiscal, however, priorities committee has recommended Rs 2.616 billion for ongoing projects and asked the APCC to decide the fate of 17 projects for the next fiscal.

Ministry of Food, Agriculture and Livestock has demanded the government Rs 28.708 billion, however, priorities committee has recommended Rs 19.192 billion for ongoing programmes and asked APCC to decide the fate of agriculture related 21 new projects.

Communication Division has placed a demand of Rs 38.385 billion, however, the Priorities Committee has recommended a sum of Rs 32.791 billion for the next fiscal year. Railways division has demanded Rs 26.930 billion and the priorities committee has proposed an allocation of Rs 11.058 billion for this division.

Education division has sought Rs 9.256 billion and against this demand priorities committee has recommended Rs 5.689 billion. Higher Education Commission has demanded Rs 22.6 billion for new and ongoing projects, however, the priorities committee has only recommended Rs 18 billion for ongoing projects and left for APCC to decide new projects.

Health division asked to allocate Rs 26.053 billion and the priorities committee has recommended Rs 18.153 billion for ongoing programmes and left the decision with APCC on new health initiatives.

Interior Division has sought Rs 9.481 billion for the next fiscal and the priorities committee has recommended Rs 5.6 billion for ongoing projects and left the decision on 69 new projects with APCC.

Daily Times - Leading News Resource of Pakistan

 

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KSE nosedives 615 points on interest rate hike ​

Saturday, May 24, 2008

KARACHI: Karachi bourse crashed down by massive 4.5 per cent on Friday with more than five dozen stocks closing at their lower locks.

Benchmark KSE 100-share Index nosedived 4.5 per cent or 615 points in a single day-session to close at 13,012 points - the eight-month lowest level.

The free-float market capitalisation based KSE 30-Index tumbled down by 808 points or five per cent to end at 15,275 points.

“The day plunge is the result of significant rise in key discount rate to 12 per cent from 10.5 per cent and the State Bank of Pakistan directive that all banks must pay minimum five per cent profits on Saving and PLS Saving products,” analysts said.

The worsening situation can be gauged from the evidence that out of total 344 active counters on board, 293 stocks declined in red against mere 34 stocks advanced. Remaining 17 scrips closed unchanged.

The day turnover remained sluggish at 154.7 million shares while overall market capitalisation dropped by another Rs187 billion to stand Rs4.004 trillion.

The day slump is the third biggest historical fall and first of this calendar year in 100-Index. The biggest crash of 696 points was recorded on Dec 31, 2007, following martyrdom of Benazir Bhutto on Dec 27, 2007. The second worst historical fall of 636 points was registered on Nov 06, 2007, following the imposing of emergency in country on Nov 03, 2007, by the then Gen. Musharraf.

Chief brunt of SBP’s decisions to curtail the inflation and narrow down the twin deficits (current account and trade) was felt strongly on banking counters, said Khurram Shahzad at InvestCap.

Other leveraging sectors including cement and textile also shared this burden of SBP corrective measures for economy, as they were availing long term financing on floating mark up rates for their business expansions, he added.

“The increase in minimum profit rates to five per cent on saving deposits would increase the cost of funds for larger commercial banks. Banks’ rates of return on these deposits are on a very lower side. Few larger commercial banks are paying only 2-3 per cent return. Therefore, impact would be higher for larger commercial banks,” said M. Imran Khan at First Capital Equity.

Besides closing at their lower circuit breakers, National Bank, Habib Bank, MCB Bank and United Bank included their huge share in negative in 100-Index. They respectively contributed 31 points, 32 points, 39 points and 23 points.

Some other second and third tier stocks also closed at or near their lower locks.

Almost all the giant energy, telecom, fertilizer and cement stocks hit lower locks and include significant points in minus in the chief 100-Index.

The biggest contribution of 104 points in negative was received from Oil and Gas Development Company in the index, followed by Pak Petroleum, Pak Oilfields and Pakistan State Oil in double digits.

Pakistan Telecommunication Company, Engro Chemical, Fauji Fertilizer Bin Qasim, DG Khan Cement, Lucky Cement and many more; all closed at the lower restricted levels while most of blue chips shed huge points in total making of indices-points.

“The energy stocks have potential to recover market from dark red zone, as international oil prices are hovering at their peak levels and are feared to move further up owing to massive speculations. But psychological sell-off stocks and fears regarding imposing of Capital Gains Tax in capital markets the market would take long to recover the losing confidence,” analysts added.

Highest volumes were witnessed in TRG Pakistan at 12.2 million closing at Rs6.31 with a loss of 99 paisa, followed by Hub Power at 12 million closing at Rs30.65 with a gain of Rs1.54, OGDC at 9.8 million closing at Rs126.35 with a loss of Rs6.65, PTCL at 7.6 million closing at Rs41.24 with a loss of Rs2.17 and PPL at 6.8 million closing at Rs253.65 with a loss of Rs13.35.

KSE nosedives 615 points on interest rate hike