Pakistan Economy - News & Updates - Archive

[Neo]

Survey highlights flaws in agriculture system ​

Wednesday, June 11, 2008

LAHORE: The Economic Survey 2007-08, released on Tuesday, highlighted flaws in the agriculture distribution system as except for wheat, the production of all food crops increased while masses faced shortages and high prices.

The survey rightly pointed out that overall increase in agricultural production in the country was pathetically low at 1.5 per cent. The big decline in production among major crops was in cotton where output fell by 9.3 per cent. Wheat was the only major food crop that recorded a decline of 6.6 per cent. In 2006-07, the crop recorded a 9.5 per cent increase which was consumed in 2007-08.

The production of other edible agricultural items that increased in 2007-08 include meat that rose by 4.1 per cent, milk 3 per cent, rice 2.3 per cent, sugarcane 16.8 per cent and maize 7.3 per cent and minor crops all consumed as food recorded an increase of 4.8 per cent.

These statistics at least belie normal perception that the shortfall in production caused the food price hike. Progressive farmer Hamid Malhi said that the performance of agriculture was not good last year from the farmers’ point of view, but as far as consumers are concerned, the farmers produced enough to provide food security to the country.

He said farmers suffered because of bad cotton crop, exploitation by sugar mills on payments for sugarcane and low wheat support price fixed by the government this year. As far as distribution of food crops is concerned, he said, the farmers have no control over it.

Another agriculturist and leader of Punjab Water Council Farooq Bajwa said that the farmers in fact are facing double exploitation that has reduced their capabilities to increase production. He said according to the Economic Survey 2007-08 15 per cent of the milk produced in the country is wasted during transportation.

He said the government has failed to upgrade farm-to-road network and establish cool chains that could save billions of rupees lost due to these drawbacks. He said Pakistan produces 4.2 billion litres of milk per year, out of which 600 million litres worth over Rs12 billion is destroyed (at a low rate of Rs20 per litre that most farmers get). Similarly, he said, the loss of 15-20 per cent fruits that rot due to inadequate facilities, is also borne by the farmers.

A farmer from wheat-rich Okara region, Mian Obaidullah, said the government this year could not procure even 5 million tonnes of wheat due to low support price. He said the government would spend more on the import of 2.5 million tonnes than the price of 5 million tonnes of domestic wheat at government support price.

He said another addition of Rs100 to the support price would have provided the government an additional 2.5 million tonnes of wheat and there would have been no need for imports as the country has produced enough food to last the whole year. He said the losses of the government would have been less had wheat for food security been arranged from domestic stocks.

Survey highlights flaws in agriculture system

 

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Economic Survey projects $20.5bn trade deficit ​

Wednesday, June 11, 2008

ISLAMABAD: The economic survey on Tuesday projects a trade deficit of $20.5 billion for the whole year keeping the existing trend of both exports and imports and it would be 12.3 per cent of the GDP.

During the first ten months of the fiscal year 2007-08, the trade deficit touched a record level of $17 billion as compared to $11 billion in the same period of the last year, the survey added.

The survey highlighted that the reasons for the decline in exports are purely serious structural issues, which need to be addressed primarily by the industry itself, with the government playing the role of a facilitator.

The exports recorded a growth of 10.2 per cent during July-April of the current fiscal year against a growth of 3.6 per cent in the same period of last year. Broad categories of exports suggest that with the exception of textile manufactures, all other categories of exports registered stellar growth, said the survey. Pakistan exports lack the exports of high technological products and software and also do not rely heavily on primary commodities for foreign exchange earnings and exports are also highly concentrated in a few items and few countries, the survey suggests more diversification for enhancing the exports.

The survey also highlighted that the bottlenecks in dwindling exports are low value addition and poor quality, obsolete use of machinery and technology, higher wastage of inputs adding to the cost of production, low labour productivity, little spending on research and development, export houses lacking capacity to meet bulk orders, inability to meet the requirement of consumers, non-adherence to contracted quality and delivery schedule and lack of marketing techniques.

About the surge of nearly 28.3 per cent in imports, the survey would touch $32.06 billion, mainly an increase in petroleum, food groups and raw materials, it said.

Deterioration in the trade balance seems to be worsening the current account deficit and it would be $11.6 billion during the fist ten months of the fiscal year, showing an increase of 75.6 per cent.

Economic Survey projects $20.5bn trade deficit

 

[Neo]

Manufacturing posts growth of 5.4pc ​

Wednesday, June 11, 2008

ISLAMABAD: Heightened political tension, deteriorating law and order situation, growing power shortages, the cumulative impact of momentary tightening and rising cost of doing business are the reasons responsible for the poor showing of manufacturing in the first nine months of 2007-08, says an economic survey released on Tuesday.

Overall manufacturing posted a growth of 5.4 per cent during the period under review against the target of 10.9 per cent and 8.1 per cent of last year whereas, large scale manufacturing accounting for 70 per cent of overall manufacturing, registered a growth of 4.8 per cent against the target of 12.5 per cent and last year’s achievement of 8.6 per cent, it added.

The main contributors to this growth of 4.8 per cent are pharmaceutical 30.7 per cent, wood products 21.9 per cent, engineering products 19.5 per cent, food & beverages 11.1 per cent, petroleum products 6 per cent and chemical 3.1 per cent, it said.

The individual items that displayed a positive growth include cotton cloth 4.8 per cent and cotton yarn 3.3 per cent in textile sectors, cooking oil 1.1 per cent, sugar 33.9 per cent and cigarettes 5.1 per cent in food, beverages and tobacco groups, cement 17.9 per cent in the non-metallic minerals products group and buses 32 per cent, LCVs 16.4 per cent and motorcycles 28.1 per cent in the automobile group, the survey said.

A few items that showed a decline in production include fertilisers 16.9 per cent, electronic 4.6 per cent, paper & paper board 5.5 per cent and iron & steel products 7.6 per cent. The individual items that exhibited negative growth include cars & jeeps 3.9 per cent, phosphatic fertiliser 24 per cent and billets 20.6 per cent, it added.

About Pakistan Steel Mills, the survey said that it registered a growth both in production value and net sales but its pre-tax profit showed a decline of nearly 35 per cent.

The government through its privatisation program earned Rs27 billion by the privation of assets like 3.2 per cent GDR of UBL, 7.5 per cent IPO of HBL, PTCL’s third installment and other proceeds, it said.

Manufacturing posts growth of 5.4pc

 

[Neo]

National grid has 1,500MW additional power, says Ashraf​

* Minister says 400MW being saved through conservation programmes​

ISLAMABAD: The government has added 1,500 megawatts (MW) of additional power to the national grid and there will be no load shedding for the major industrial and agricultural sectors, Federal Water and Power Minister Raja Pervez Ashraf said on Tuesday.

He told reporters after the inaugural session of the 2nd Japan-SAARC Symposium ‘Energy and Connectivity’ that load shedding for domestic consumers would also be reduced due to improvements in hydroelectric power generation and would be completely eliminated from next year.

Ashraf said 1,500MW had been added to the system by upgrading and enhancing the existing generation capacity of independent power producers and generation companies. He said the government was fully committed to eliminating the menace of load shedding by adopting a rational policy and setting up new power plants on a fast track basis to minimise ‘miseries’ faced by the population.

Conservation: He said infrastructure was being developed to import 1,000MW from Iran. To questioning, he said that 400MW was being received through conservation. He also urged traders to implement the conservation plan approved by the government as a national service. Earlier, the minister informed the participants of the symposium that the government’s strategy for the power sector depended on the implementation of its “action plan”, which included harnessing indigenous hydroelectric and coal resources and implementing wide-ranging power sector reforms.

Ashraf said short-term measures (from 2008-2011) should add generation capacity of 7,067MW. The medium term plan (2011-2020) focuses on maximising coal-based and mega-hydroelectric (15,000MW) power generation projects. He said the government was moving ahead with power import projects of around 1,000MW each from Iran and Tajikistan for long-term projects. The government is also planning to provide resources for producing more nuclear power generation in co-operation with China to achieve a medium-term target of 3,000MW, he added.

The minister said that being a member of the South Asian Association for Regional Co-operation, Economic Co-operation Organisation and the Shanghai Co-operation Organisation, Pakistan was fully committed to cross-border energy co-operation. The country would take immediate strategic measures to enhance energy security in the region, he added.

Also present at the symposium, former Petroleum minister Usman Aminuddin said that the Iran-Pakistan-India (IPI) gas pipeline project could not become a reality without building trust between India and Pakistan. He said India could benefit with $60 billion from the IPI gas pipeline project.

However, he added, the project was being delayed due to American pressure on India. He also hinted that the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline deal could not be completed until Turkmenistan presented an evaluation report about its gas reserves.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Per capita income tops US$1,000 for first time ​

* Govt releases Economic Survey 2007-08
* Growth down to 5.8pc
* Agriculture output grows 1.5pc, manufacturing 5.4pc
* Inflation in 10 months stood at 10.3pc​

ISLAMABAD: Strong growth in service industries and consumer spending increased Pakistan’s per capita income to more than $1,000 for the first time, and prevented a sharper slowdown in the 2007-08 fiscal year, according to the Pakistan Economic Survey released on Tuesday.

But an un-sustained growth pattern was not able to save the economy from political and economic shocks, and Pakistan’s economy missed the 7.2 percent growth target fixed for fiscal year 2007-08. Rescued by the services sector, the Gross Domestic Product (GDP) growth stood at 5.8 percent – even lower than the revised downwards target of 6.8 percent because of the rising oil and food prices, continued political uncertainty and law and order problems.

Agriculture output: Giving details on the economy, Finance Minister Syed Naveed Qamar said agriculture output grew only 1.5 percent in the current fiscal year because of poor results from Pakistan’s main wheat and cotton crops.

Manufacturing: Manufacturing grew by 5.4 percent, hampered by capacity problems, power shortages and law and order disturbances. The services sector grew by a higher-than-expected 8.2 percent against the target 7.1 percent, being the main driver of GDP growth, the survey said.

Inflation: Inflation in the first ten months of the fiscal year was 10.3 percent, driven by rising oil and food prices but also by a sharp increase in government borrowing from the central bank.

Qamar said public debt was 53.5 percent of the GDP at the end of this fiscal year, compared with 55.2 percent in June 2007.

External debt liabilities rose from $40.5 billion to $45.9 billion due to a rise in the oil prices and higher prices and increased import of food. Tax collection by the end of June is likely to be at Rs 1 trillion, missing the target of Rs 1.025 trillion. Exports grew by 10.2 percent between July 2007 and April 2008 but the overall export target is likely to be missed. Imports increased by 28.3 percent between July and April. sajid chaudhry/agencies

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Budget for 2008-09 Fiscal Year to be presented today: Salaries, pensions likely to be increased​

* Outlay likely to be around Rs 2.8 trillion
* Revenue target estimated to be around Rs 1.2 trillion
* Debate on budget to continue from June 14-30​

ISLAMABAD: Salaries and pensions are likely to increase in the Rs 2.8 trillion federal budget for the 2008-09 fiscal year the Pakistan People’s Party (PPP) led coalition government will table in the National Assembly today (Wednesday).

Salaries of government employees belonging to grades 1 through 16 are likely to increase by 20 percent, and of those belonging to grade 17 through 22 by 15 percent through a “dearness allowance”, official sources told Daily Times. The Online news agency said a 10 percent increment was also likely in pension of retired government officials.

Finance Minister Syed Naveed Qamar will present the budget in the Lower House at about 6:30pm and his speech will be aired live on television and radio.

The government aims at lowering the budget deficit to around Rs 560 billion or 4.6 percent of the Gross Domestic Product (GDP) in 2008-09, after the highest-ever Rs 737.8 billion deficit this fiscal year (2007-08).

The sources said the new government had decided to increase the defence budget by 7.2 percent to Rs 295.5 billion against the Defence Ministry’s Rs 330 billion demand. Considering 10 percent inflation and the rising prices of oil, which accounts for major part of the defence spending, the increase is negligible, they added.

Following protest by the provinces, the government has decided to increase the allocation to the Public Sector Development Programme (PSDP) for 2008-09 to Rs 541 billion – 4.4 percent of the GDP – compared with Rs 523 billion last year. It will finance the PSDP with foreign loans worth Rs 67 billion.

Revenue target: The tax collection target is likely to be fixed at around Rs 1.2 trillion with an emphasis on increasing taxes and duties on luxury goods and including several un-taxed sectors in the tax net, with a possible amnesty for legalising undisclosed assets by paying taxes ranging from 2 percent to 10 percent.

The coming fiscal year has been termed “the year of fiscal consolidation”, and the government has set an economic growth target of 5.5 percent of the GDP. Economic growth remained 5.8 percent this fiscal year.

Citing official sources, Online said Rs 523 billion would be allocated to the Annual Development Programme in the budget – Rs 373 billion for the federation and Rs 150 billion for the provinces.

It said the government would allocate Rs 34 billion to subsidise essentials for the poor under a Benazir Card scheme. The current account deficit target is likely to be set at 5 percent, it added.

Official sources also told Daily Times the government will set up a Rs 50 billion “pro-poor fund” to provide cash grants to the poor to meet inflationary pressures and challenges.

Debate: Debate on the budget will begin on June 14 and the session will continue until June 30. The National Assembly proceedings will begin at 10am and end at 8:30pm every day during the budget session.

According to the state-run APP news agency, “The budget will focus on infrastructure, human capital and social sector development, poverty reduction, promotion of investments and exports, agriculture sector development and provision of relief to the common man.”

“The government is keen to provide relief to the people in the next budget for which concrete measures are being considered.”

main points

* Benazir Card scheme to provide Rs 34 billion subsidy on essentials

* Defence budget to increase by 7.2 percent to Rs 295.5 billion, against a Rs 330 billion demand

* Salaries of government employees belonging to grades 1 through 16 likely to increase by 20 percent, and grades 17 through 22 by 15 percent

* Pensions to increase by 10 percent

* Emphasis on increasing taxes and duties on luxury goods

* Amnesty for legalising undisclosed assets by paying taxes ranging from 2 percent to 10 percent

* Budget deficit likely to be Rs 560 billion or 4.6 percent of GDP

* Rs 541 billion to be allocated to the Public Sector Development Programme (PSDP)

* Rs 523 billion to be allocated to the Annual Development Programme

* Economic growth target set at 5.5 percent of GDP

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Telecom sector generates Rs100bn​

ISLAMABAD, June 10: Telecom sector remains a major source of revenue generation for the government as Rs100.5 billion were collected in the form of taxes, duties and regulatory charges during the previous year, the Economic Survey 2007-08 said.

“Service sector continued to maintain a solid pace of expansion at 8.2 per cent compared to 7.6 per cent in 2006-07 as over three-fourth (75 per cent) contribution to this year's growth came alone from the service sector,” Finance Minister Naveed Qamar said here on Tuesday while releasing the Economic Survey 2007-08.

“Therefore, this year's growth is services sector-led-growth,” the minister observed.

Referring to the contribution to government revenues, the survey recorded that a total of Rs36.6 billion as general sales tax or central excise duty was collected by the government. It is expected, the survey projected, the collection would grow exponentially in the coming years.

During 2006-07, the government also collected Rs17.6 billion as activation tax on new mobile connections at the rate of Rs500.

A foreign direct investment (FDI) inflow of $811.6 million also came in the telecom sector during 2007-08 (July-March), which is almost one-third of the total FDI in the country during the period. This trend has continued and during July 07 to Dec 07, $653.4 million FDI inflows came in the telecom sector.

The telecommunications sector liberalization also created huge employment opportunities (direct and indirect) and it is estimated that 1.36 million jobs were created in 2006-07 as compared to 705,368 in 2004-05.

According to the survey, Pakistan has become one of the fastest growing mobile markets among emerging telecom markets.

This year the sector grew by 80 per cent whereas average growth rate in last four years is more than 100 per cent.

Total cellular subscriber base today stands at 82.5 million (March 2008) whereas it was 34.5 million in 2006 and 12.7 million in 2005. The tremendous growth is attributed to many internal and external factors starting from deregulation down to implementation of mobile number portability.

Almost 90 per cent of total population in Pakistan is covered with mobile networks in addition to availability of fixed and Wireless Local Loop services.

Till December 2007, more than 7,011 cities, towns and villages have mobile networks by one or all operators.

But growth in the broadband market is slow despite the fact that services have been available since almost five years.

Currently there are a total of 12,689 broadband subscribers which provide a dismal picture when compared with other similar economies.

Telecom sector generates Rs100bn -DAWN - Business; June 11, 2008

 

[Neo]

PSDP allocation increased by 20pc ​

Thursday, June 12, 2008

ISLAMABAD: The government on Wednesday announced Rs549.7 billion for the Public Sector Development Programme (PSDP) for FY2008-09, with a special allocation of Rs34 billion for pro-poor income support programme, Rs28.42 billion for the People’s Works Programme and Rs10 billion for the construction of dams (large and small) to overcome the energy crisis.

The PSDP, unfolded by Finance Minister Syed Naveed Qamar in the National Assembly on Wednesday, revealed an increase of 20 per cent against the revised estimates of FY2007-08 of Rs458 billion.

Out of the total PSDP, which is 4.5 per cent of GDP, the federal government’s share, including ERRA’s, is at Rs400 billion for 2008-09 which is 30 per cent higher than the revised estimates of 2007-08 of Rs308 billion. The provincial programme for 2008-09 has been estimated at Rs150 billion.

The Earthquake Rehabilitation and Reconstruction Authority (ERRA) has been allocated Rs27 billion for the budget estimates 2008-09. The share of federal ministries/divisions in the 2008-09 PSDP is Rs234 billion showing a rise of 19 per cent over revised estimates of FY2007-08.

The corporation’s PSDP for 2008-09 have been placed at Rs51 billion indicating an increase of 19 per cent over revised estimates of FY2007-08.

Special programmes have been allocated a sum of Rs62 billion in the PSDP 2008-09 which include Rs34 billion for income support fund and Rs28 billion for the People’s Works Programme.

An amount of Rs26 billion has been provided in the budget for the FY2008-09 for the development of special areas, ie, AJ&K, NA and FATA which is higher by 25 per cent as compared with the revised FY2007-08.

It is the first time that the largest-ever allocation of Rs197.56 billion (53.25 per cent of the federal PSDP) has been made for social sector development. For the development of physical infrastructure, Rs141.69 billion (or 38.19 per cent) has been allocated while for other sectors Rs31.74 billion or 8.55 per cent of the total federal share has been earmarked.

Among the government’s special areas of programmes, the People’s Works Programme-I would get Rs4.42 billion and the People’s Works Programme-II Rs24 billion.

In the social sector, the allocation for the Health Division has been increased to Rs19 billion for FY2008-09 from Rs14.27 billion allocated for the outgoing fiscal, KA and NA Division’s allocations increased to Rs17.61 billion from Rs13.72 billion; State and Frontier Region Division’s allocation increased to Rs8.66 billion from Rs7.5 billion; Environment Division’s Rs2.25 billion from Rs1.62 billion; Culture Division’s Rs413 million from Rs378 million, Finance Division’s Rs50.75 billion from Rs16.96 billion; Women Development Division’s Rs334 million from Rs163 million; Social Welfare and Special Education Division’s Rs509 million from Rs428 million; Cabinet Division’s Rs2.88 billion from Rs494 million; Housing and Works Division’s Rs4.07 billion from Rs1.2 billion; Narcotics Control Division’s Rs768 million from Rs277 million; Defence Production Division’s Rs1.45 million from Rs527 million, and for the National Reconstruction Bureau’s (NRB) allocations has been increased to Rs76.7 million from Rs50 million allocated in the outgoing fiscal year.

The areas where allocations for the FY2008-09 have been reduced as against the outgoing fiscal year are special programmes whose allocation has been reduced to Rs24.42 billion for the next fiscal from Rs34.42 billion in the outgoing fiscal; Education Division’s allocation is down to Rs6.27 billion from Rs6.51 billion, Information Technology and Telecommunication Division’s is down to Rs1.976 billion from Rs3.21 billion; Science and Technology Research Division’s down to Rs3.015 billion from Rs3.6 billion; Labour and Manpower Division’s Rs123.8 million from Rs198.4 million; Local Government and Rural Development Division’s to Rs108 million from Rs127.9 million; Sports Division’s Rs350.4 million from Rs522.8 million; Youth Affairs Division’s Rs34 million from Rs152 million and Tourism Division’s allocation has been reduced to Rs19 million against the previous last fiscal year’s Rs167.4 million.

Besides, allocation for the Planning and Development Division for FY2008-09 have been reduced to Rs11.11 billion from Rs14.44 billion; the Interior Division’s to Rs6.94 billion from Rs9.5 billion; Defence Division’s to Rs4.94 billion from Rs5.13 billion; Commerce Division’s to Rs463 million from Rs1.58 billion; Ministry of Foreign Affairs to Rs407 million from Rs579 million; Information and Broadcasting Division to Rs1.04 billion from Rs1.54 billion; Establishment Division to Rs293 million from Rs503 million; Law, Justice and Human Rights Division to Rs2.38 million from Rs4.02 billion and Revenue Division’s allocation for the FY2008-09 has been reduced to Rs2.37 billion from Rs2.53 billion in the outgoing fiscal.

For the Pakistan Atomic Energy Commission Rs15.33 billion has been earmarked; Rs457.5 million for the Pakistan Nuclear Regulatory Authority, Rs850 million for the Petroleum and Natural Resource Division, Rs36.8 billion for the Communication Division (including the NHA), Rs372 million for the Sorts and Shipping Division and Rs11.28 billion for the Railways Division.

The infrastructure sector, which includes water, power and roads projects, has been given the second largest share of the total federal PSDP allocation.

In infrastructure, a huge chunk of Rs76.57 billion would go to the water and power sectors to implement ongoing and new projects. This includes Rs62.42 billion for water sector and Rs14.16 billion for the power sector.

The government has also earmarked Rs10 billion for the construction of new small and large dams at various locations of the country.

Besides for the ongoing programmes, Rs8.5 billion have been earmarked for the Kachi Canal (phase-I), Rs3 billion for the Rainee Canal (phase-I), Rs1.8 billion for the raising of the Mangla Dam, Rs2 billion for the Gomal Zam Dam, Rs2.5 billion for the lower Indus right bank irrigation and drainage Sindh, Rs1.2 billion for the Balochistan effluent disposal into RBOD (RBOD-III), Rs1.5 million for the Greater Thal Canal phase-I and Rs500 million for the Kurram Tangi Dam have been allocated.

Among the ongoing power sector projects, the Neelum Jehlum hydropower project has been allocated Rs7.5 billion, Bhasha Diamer Dam Project Rs417 million, Golan Gol Hydro power project, Chitral Rs700 million, Khan-kwarhydro power project, NWFP Rs1.175 billion, Allai Khawar hydro power project, NWFP Rs2.53 billion, Dubir Khawar hydro power project NWFP Rs3.5 billion.

For all 8 electric power distribution companies, Rs14.48 billion have been allocated for various projects. These include the 6th secondary transmission and grids project (Rs9.1 billion), for their distribution and system augmentation programme Rs2.62 billion and another Rs2.76 billion were allocated for these distribution companies’ rehabilitation, distribution, renovation and augmentation projects.

Among the ongoing health projects, Rs5.50 billion have been allocated for the national programme for family planning and family health care; Rs6 billion for the expanded programme for immunisation (EPI), Control of Diarrheal Disease (CDD); Rs2.16 billion for the national maternal, neonatal and child health programme. Among new projects, Rs500 million have been allocated for the Prime Minister’s special initiative for expansion and upgradation of BHUs.

For food, agriculture and livestock development, Rs20.52 billion have been allocated. Among the ongoing projects, Rs9.5 billion have been allocated for the national programme for the improvement of watercourses in the country, Rs1.35 billion for the land and water resources development project for poverty reduction, Rs1 billion for water conservation and productivity enhancement through high efficiency irrigation system, Rs750 million for the agribusiness development, Rs316.7 million for livestock production and development of meat production, Rs600 million for research of agriculture development programme and Rs1.6 billion for the special programme for food security and productivity enhancement of small farmers in 1,012 villages crop maximisation project-II.

Among new projects, Rs500 million have earmarked for the PM’s special initiative for white revolution and Rs500 million for the wheat production maximisation programme.

Rs10.46 billion have been earmarked for industries, production and special initiatives. Under this sector, among the ongoing projects, Rs2 billion were earmarked for clean drinking water for all, Rs600 million for the expansion of Utility Stores Corporation’s network, Rs510.3 million for Gujranwala Tools, Dies and Moulds Centre, Rs400 million for gems and jewelleries development, Rs400 million for marble and granite sector’s development.

For the textile sector, the government allocated only Rs769.6 million. Among the ongoing projects, Rs367.68 million have been allocated for the Faisalabad garment city project and Rs147.6 million for the Lahore garment city project.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

IPPs termed risky approach ​

Thursday, June 12, 2008

KARACHI: Finance Minister Naveed Qamar on Wednesday finally cleared the ambiguity surrounding the country’s power policy, when he declared in his budget speech the revival of private sector-centric Power Policy of 1994, just months after the caretaker government firmed up contracts to generate more than 1,000 megawatts in the public sector.

The minister blamed the last government for the current power situation, vowing to attract private investment to overcome the energy crisis mainly arising due to more than 4,000MW power shortfall.

“It was the Pakistan People’s Party (PPP), which added the much-needed electricity to the national grid,” he said while presenting the budget for fiscal 2008-09. “We have allocated Rs66 billion for generation, distribution and alternative energy.”

In 1994, the then PPP government led by the late Benazir Bhutto introduced a power policy, which helped increase the country’s power generation capacity by offering incentives to the private sector. Prior to that, a self-imposed ban restricted governments from investing resources for power production.

However, contrary to the largely held belief, some experts point out that the 1994 power policy had not succeeded, considering its economic outcome and harassment of private investors by subsequent governments. “It will not work,” said Sibte Ahmed Jafri, President of Institute of Electronic and Electrical Engineers Pakistan, referring to failure of the last government to attract investors during its eight-year rule. “That proposition is very expensive.”

He said the 1994 power policy offered much higher tariff to power plants, something which led to subsequent prosecution of some government officials and investors. “The government needs not to involve private sector when it comes to utilities,” he said, adding that “International financial institutions will lend money to the government to undertake projects.” Earlier this year, Pakistan secured financing for a 450 megawatt Nandipur power plant in Lahore, which marked the first power plant in the public sector after seventeen years. The project will cost $329 million including foreign financing component by French bank BNP Paribas and local component by Bank of Punjab.

Success in securing finances from private banks was a major achievement on part of the government and reflected its independence since the shift in power policy, which favored private power projects, was pressured by development institutions like World Bank. The then Managing Director of Pakistan Electric Power Company (PEPCO) Munwar Baseer told The News that the initiative was taken after the private sector failed to come forward.

That project was followed by another 550MW power plant being set up in Chichuki Malian in the public sector. Both projects, a senior WAPDA official requesting anonymity confirmed, are in implementation stages and won’t be scrapped. “The public policy is to promote the private sector,” he added. “But that is going to be expensive in the long run.”

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

Text of Finance Bill 2008 ​

Thursday, June 12, 2008

ISLAMABAD: Finance Minister Naveed Qamar on Wednesday presented the Finance Bill to give effect to the financial proposals of the federal government for the year beginning on the first day of July, 2008, and to amend certain laws. Following is the text of the bill.

WHEREAS it is expedient to make provisions to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2008, and to amend certain laws for the purposes hereinafter appearing;

It is hereby enacted as follows:-

1. Short title, extent and commencement.- (1) This Act may be called the Finance Act, 2008.

(2) It extends to the whole of Pakistan.

(3) It shall, unless otherwise provided, come into force on the first day of July, 2008.

2. Amendment of Act XLV of 1860. In the Pakistan Penal Code, 1860 (Act XLV of 1860), after section 489F, the following new section shall be inserted, namely:

“489G. Counterfeiting or using documents resembling national prize bonds or unauthorized sale thereof. Whosoever counterfeits or causes to counterfeit, or performs any act to use for any purpose whatsoever or delivers to any person, any document purporting to be, or in any manner resembling to the national prize bonds or the serial number of national prize bonds, or promotes the sale of national prize bonds or serial number of national prize bonds, in contravention of the rules made for that purpose, shall be punishable with the imprisonment for a term which may extend to five years, or with fine not exceeding one hundred thousand rupees, or with both.”.

3. Amendment of Schedule II, Act V of 1898. In the Code of Criminal Procedure, 1898 (Act V of 1898), in Schedule II, after the entries relating to section 489F, the following new entries shall be inserted, namely:-

“489G Counterfeiting or using documents resembling national prize bonds or unauthorized sale thereof would (attract) imprisonment of either description for five years or fine of 100,000 rupees or both (through) Court of Sessions or Magistrate of the first class”

4. Amendment of Act VII of 1947. In the Foreign Exchange Regulation Act, 1947 (VII of 1947), after section 23J the following new section shall be inserted, namely:-

“23 K Powers to impose penalty, etc.-

(1) Without prejudice to provisions of sections 3AA, 23 or 23B if any person, in the opinion of State Bank, contravenes any provision of this Act, or any order, rule, regulation or direction issued there under the State Bank may, impose penalty which may extend to one million rupees for each contravention and where the contravention is a continuous one with a further penalty which may extend to twenty thousand rupees for each day during which such contravention continues.

(2) Where the person guilty of such contravention is a company or other body corporate, every director, manager, secretary or other officer or agent thereof shall also be deemed guilty of such contravention if the contravention was committed with his knowledge or consent or if he did not exercise due diligence to prevent the commission of the offence.

(3) If any person, fails to pay any penalty imposed on him or it, within the time stipulated in the order imposing the penalty, the State Bank may, without any notice to such person, recover the amount of such penalty from any account, or assets, monetary or otherwise, of the defaulter held with State Bank or any bank or a financial institution.

(4) If any bank or financial institution to which notice has been sent under sub-section (3) fails to debit the amount of penalty under the said sub-section, it shall itself be liable to pay such amount to the State Bank, as if it had itself committed the contravention under sub-section (1)”.

5. Amendment of Ordinance XXV of 1961.- In the Petroleum Products (Development Surcharge) Ordinance, 1961 (XXV of 1961), the following further amendments shall be made, namely:-

(1) in section 2, -

(a) after sub-section (4B), the following new sub-section shall be inserted, namely:-

“(4C) “licensee” means the licensee defined under the Compressed Natural Gas (CNG) (Production and Marketing) Rules, 1992, or the Liquefied Petroleum Gas (Production and Distribution) Rules, 2001, as the case may be, and as specified by rules made under section 6;”; and

(b) in sub-section (5), after the words “First Schedule”, the words “and includes Compressed Natural Gas and Liquefied Petroleum Gas” shall be inserted; and

(2) in section 3, after sub-section (1), the following new sub-section shall be added, namely:-

“(1A) Every licensee shall pay to the Federal Government a development surcharge that may be prescribed by the rules made under section 6.”.

6. Amendment of Ordinance X of 1965.- In the Provincial Employees’ Social Security Ordinance, 1965 (W.P. Ordinance No. X of 1965), the following further amendments shall be made, namely. -

(1) In section 2, -

(a) in clause (8), in sub-clause (f), for the word “five”, occurring twice, the word “ten” shall be substituted; and

(b) in clause (25a), for the words “two hundred ten”, the words “three hundred and sixty” shall be substituted;

(2) in section 20, -

(a) in sub-section (1), after the word “rate” the words “not more than six per cent” shall be inserted; and

(b) in the proviso, for the word “two”, the word “four” and for the word “five”, the word “ten” shall respectively be substituted; and

(3) in section 20A, in sub-section (1), for the words “two hundred ten”, the words “three hundred and sixty” shall be substituted.

7. Amendment of Ordinance VI of 1968.- In the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (W.P. Ordinance No. VI of 1968), the following further amendments shall be made, namely: -

(1) in section 1, in sub-section (1), the words “West Pakistan” shall be omitted; and

(2) in the Schedule, in standing order 15, in paragraph (5), the words, full stop and comma “subsistence allowance of not less than fifty percentum of wages. If the workman is found not guilty, he shall be deemed to have been on duty during the period of suspension and shall be entitled” shall be omitted.

8. Amendments of Act IV of 1969. - In the Customs Act, 1969 (IV of 1969), the following further amendments shall be made, namely:-

(1) after section 3D, the following new section shall be inserted, namely;

“3DD. Directorate General of Post Clearance Audit (PCA). - The Directorate General of Post Clearance Audit (PCA) shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.”;

(2) in section 21, clause (ab) shall be omitted;

(3) in section 155F, in sub-section (1), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that the Collector of Customs may, in exceptional circumstances, after recording reasons in writing, suspend the use of unique user identifier of any person forthwith on receipt of any complaint or information about violation of the Customs Act, 1969 (IV of 1969).”;

(4) in section 156, in sub-section (1), in the Table, in column (1), against serial number 43, in column (3), after the word “owner” occurring for the first time, the words “or any other such person having custody of the aforesaid goods” shall be inserted;

(5) in section 179, in sub-section (3), for the word “ninety”, occurring for the first time, the words “one hundred and twenty” shall be substituted;

(6) in section 194-C, in sub-section (4), in clause (c), for the word “five” the word “ten” shall be substituted;6

(7) in section 195-C, after sub-section (4), following new sub-section (4A) shall be inserted, namely;-

“(4A) Notwithstanding anything contained in sub-section (4), the Chairman may, on the application of an aggrieved person for reasons to be recorded in writing and on being satisfied that there is an error in the order or decision, pass such order as he deems just and equitable.”; and

(8) the amendments set out in the Schedule to this Act shall be made in the First Schedule to the Customs Act, 1969 (IV of 1969).

9. Amendment of Ordinance XVII of 1969.- The following further amendments shall be made in the Securities and Exchange Ordinance, 1969 (XVII of 1969), namely:-

(1) in section 2, in sub-section (1), in clause (cd), after the word “delivery” occurring for the first time, the words “or settlement” shall be inserted;

(2) for sections 15A and 15B, the following shall be substituted, namely:-

“15A. Prohibition of insider trading.-

(1) No person shall indulge in insider trading.

(2) Insider trading shall include, -

(a) an insider person transacting any deal, directly or indirectly, using inside information involving listed securities to which the inside information pertains, or using others to transact such deals;

(b) any other person to whom inside information has been passed or disclosed by an insider person transacting any deal, directly or indirectly, using inside information involving listed securities to which the inside information pertains, or using others to transact such deals;

(c) transaction by any person as specified in clauses (a) and (b), or any other person who knows, or ought to have known under normal and reasonable circumstances, that the information possessed and used for transacting any deal is inside information;

(d) an insider person suggesting or recommending to another person to engage in dealing in any listed securities to which the inside information possessed by the insider person pertains, without the inside information being disclosed to the person who has dealt in such securities.

(3) The following shall not be deemed as insider trading, -

(a) any transaction performed under an agreement that was concluded before the time of gaining access to inside information; or

(b) the disclosure of inside information by an insider person as required under law.

(4) No contract shall be void or unenforceable by reason only of an offence under this section.

15B. Inside information.-

1) “Inside information” means,

(a) information which has not been made public, relating, directly or indirectly to listed securities or one or more issuers and which, if it were made public, would be likely to have an effect on the prices of those listed securities or on the price of related securities;

(b) in relation to derivatives on commodities, information which has not been made public, relating, directly or indirectly, to one or more such derivatives and which are traded in accordance with accepted market practices on those markets; or

(c) in relation to persons responsible for the execution of orders concerning listed securities, information which is conveyed by a client to such person and related to the client’s pending orders.

15C. Insiders.-

(1) Insiders shall include, -

(a) sponsors, executive officers and directors of an issuer;

(b) sponsors, executive officers, directors and partners of a legal person or unincorporated business association, in which the issuer holds shares or voting rights, directly or indirectly, of twenty per cent or more;

(c) sponsors, executive officers, directors and partners of a legal person or unincorporated business association who holds, directly or indirectly, shares or voting rights of ten per cent or more in an issuer;

(d) sponsors, executive officers and directors of an organization, that has been engaged in the placement of listed securities or the public offer of securities or the issuing and marketing of such securities, who has had access to insider information during his employment till a period of one year after leaving employment;

(e) any natural person holding, directly or indirectly, ten per cent or more shares of an issuer;

(f) sponsors, executive officers and directors of credit institutions in which the issuer has an account;

(g) any person obtaining inside information as part of his employment or when discharging his usual duties in an official capacity, or in any other way relating to work performed under contract of employment or otherwise;

(h) any person obtaining inside information through unlawful means; and

(i) a spouse, lineal ascendant or descendant, partner or nominee of a person referred to in clauses (a) to (h).

15D. Listed companies responsibilities to disclose inside information.-

(1) Listed companies shall inform the public, in the manner specified by the Commission, as soon as possible of inside information which directly concerns the listed securities.

(2) Listed companies may delay the public disclosure of inside information, as referred to in sub-section (1) in order not to prejudice their legitimate interests, provided that such delay will not mislead the public and provided that the company is able to ensure the confidentiality of the information. The company shall inform the Commission of the decision to delay the public disclosure of inside information forthwith.

(3) Whenever a listed company or a person acting on its behalf, discloses any inside information to any third party in the normal exercise of employment, profession or duties, complete and effective public disclosure of that information must be made simultaneously in the manner specified by the Commission:

Provided that the provisions shall not apply if the person receiving the information owes a duty of confidentiality, regardless of whether such duty is based on a law, regulations, articles of association or contract.

(4) Listed companies or persons acting on its behalf, must maintain and regularly update a list of persons employed, under contract or otherwise in the manner specified by the Commission, who have access to inside information, and provide such list to the Commission whenever the Commission requests it.

(5) Persons discharging managerial responsibilities within a listed company and, where applicable, persons closely associated with them, shall notify the Commission of transactions conducted on their own account relating to the securities of such listed company in the manner specified by the Commission.

(6) The Exchanges shall adopt structural provisions, operating procedures and surveillance techniques to detect and prevent insider trading and market abuse practices, within such time as may be specified by the Commission and according to the regulations made hereunder.

15E. Liability for contravention.-

(1) Any person who contravenes the provisions of sub-section (1) of section 15A shall be liable to fine, to be imposed by the Commission, of rupees ten million or three times the amount of gain made or loss avoided by such person, or loss suffered by another person, whichever amount is higher.

(2) In addition to the fine imposed under sub-section (1), such person,-

(a) may be directed by the Commission, -

(i) to surrender to the Commission, an amount equivalent to the gain made or loss avoided by him; or

(ii) to pay any other person who has suffered a loss, an amount equivalent to the loss so suffered by such person; and

(b) may, where such person is an executive officer, director, auditor, advisor, consultant of a listed company, be removed from such office by an order of the Commission and debarred from auditing any listed company for a period of upto three years; or

(c) may, where such person is registered as a broker or agent, be liable to cancellation of registration.

(3) Where an insider person discloses inside information to any other person who is not required to possess such information for any reason, the insider person shall be liable to fine, to be imposed by the Commission, which may extend to rupees thirty million.

15F. Power to make Regulations.- The Commission may make regulations to regulate persons who produce or disseminate research concerning listed securities or issuers of listed securities and persons who produce or disseminate other information recommending or suggesting investment strategy, intended for distribution channels or for the general public.” ;

(3) in section 21, -

(a) in sub-section (1), in clause (b), after the word “any” occurring for the second time, the words “person or” shall be inserted;

(b) in sub-section (2), -

(i) after the word “Exchange”, occurring for the first time, the words “or any other person” shall be inserted; and

(ii) after the word “such”, occurring for the first time, the words “person or” shall be inserted;

(4) in section 32E, after sub-section (1), the following new sub-section (1A) shall be inserted, namely:-

“(1A) Without prejudice to the generality of the foregoing power and sub-section (2) of section 33, the rules made in pursuance of this section may inter alia provide for-

(a) the matters to be included in any scheme of demutualization and corporatization and the manner of its approval by the members of the stock exchange;

(b) the power of the Commission to approve any scheme of demutualization and corporatization including the power to impose any conditions;

(c) the process and procedure to be followed for purposes of demutualization and corporatization;

(d) matters regarding appointment of directors and chairman of the board of a stock exchange after demutualization, including but not limited to restrictions, if any, on such appointments;

(e) restriction of rights, if any, attached to the shares issued pursuant to corporatization;

(f) matters including restrictions, if any, on disinvestment, further issue and sale and purchase of shares of a stock exchange after demutualization;

(g) matters regarding limits or restriction on holding of shares by different categories of shareholders of a stock exchange, and the requirement for divestment of shares by shareholders in particular circumstances; and

(h) matters regarding trading rights on a stock exchange and restrictions if any in this regard.”.

10. Amendment of Ordinance, XX of 1969. - In the Minimum Wages for Unskilled Workers Ordinance, 1969 (W.P. Ordinance No. XX of 1969), in the Schedule, in column (2), for the figure “4600”, occurring thrice, the figure “6000” shall be substituted.

11. Amendments of Ordinance No. XXXVI of 1971. - In the Workers Welfare Fund Ordinance, 1971 (XXXVI of 1971), the following further amendments shall be made, namely: -

(1) in section 2, in clause (f) after sub-clause (iv), the following new sub-clause shall be added, namely.-

“(iva) any establishment, to which the West Pakistan Shops and Establishment Ordinance, 1969 (W.P. Ordinance No.VIII of 1969), for the time being applies;”;

(2) in section 4,

(a) in sub-section (1), the words “of so much” and “as is assessable under the Ordinance” shall be omitted;

(b) in sub-section (4) the words and comma “At the time of making an assessment under the Ordinance, or as soon thereafter as may be the” and “on the basis of the income so assessed” shall be omitted; and

(c) in sub-section (5) for the word “assessed” the word “total” shall be substituted and the words “subsequent to the assessment made under the Ordinance” shall be omitted; and

(3) in section 11-B, in sub-section (3) after the word “sanction” at the end the words “with the previous approval of the Governing Body” shall be added.

12. Amendments of Act XIV of 1976. - In the Employees’ Old-age Benefits Act, 1976 (XIV of 1976), the following further amendments shall be made, namely: -

(1) in section 1, in sub-section (4), -

(a) in clause (i), -

(i) for the word “ten”, occurring twice, the word “five” shall be substituted; and

(ii) for the colon at the end, a full stop shall be substituted and thereafter the proviso shall be omitted; and

(b) in clause (ia) for the word “twenty”, the word “five” shall be substituted;

(2) in section 9, in sub-section (1), for the word “six” the word “five” shall be substituted;

(3) in section 22, in sub-section (2), in clause (ii), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely: -

“Provided that nothing in this section shall apply to an employee insured under the provisions of this Act on or after 1st day of July, 2008.”;

(4) in section 47, clause (e) shall be omitted; and

(5) In the Schedule, -

(a) for paragraph (2), the following shall be substituted, namely: -

“(2) The monthly wages of an insured person, referred to in paragraph (1), shall be calculated on the basis of wages on which contributions were paid in respect of the twelve calendar months immediately preceding the date on which insured person fulfils the conditions for entitlement to any benefits under this Act:

Provided that the old-age pension or invalidity pension payable to an insured person and survivor’s pension payable to the survivors of the deceased insured person shall not be less than two thousand rupees per month for pension commencing on or after 1st day of July, 2008.”; and

(b) in paragraph (3) for the figure “2007” the figure “2008” shall be substituted.

13. Amendment of Ordinance XXXI of 1980.- In the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980), the following further amendments shall be made, namely: -

(1) after section 18, the following new section shall be inserted, namely: -

“18A. Power to issue directions.-(1) Notwithstanding anything contained in any other provision of this Ordinance, where the Registrar is satisfied that it is necessary and expedient so to do, -

(a) in the public interest; or

(b) to prevent the affairs of any modaraba from being conducted in a manner detrimental to the interest of holders of Modaraba Certificates; or

(c) to secure the proper management of any modaraba generally, he may issue such directions to a modaraba company or the modaraba companies generally, as he may deem fit, and the modaraba company and its management shall be bound to comply with such directions.

(2) The Registrar may, on a representation made to him or on his own motion, modify or withdraw any direction issued under sub-section (1) and in so modifying or cancelling any direction may impose such conditions as he thinks fit.”;

(2) after section 41, the following new sections shall be inserted, namely: -

“41A. Power to make regulations.- (1) The Commission may, by notification in official Gazette, make such regulations as are necessary to carry out the purposes of this Ordinance:

Provided that the power to make regulations conferred by this section shall be subject to the condition of previous publication and before making any regulations the draft thereof shall be published in the manner considered most appropriate by the Commission for eliciting public opinion thereon within a period of not less than fourteen days from the date of publication.

(2) Any regulation made under sub-section (1) may provide that a contravention thereof shall be punishable with a fine which may extend to one hundred thousand rupees and where the contravention is a continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which such contravention continues.

41B. Power to issue directives, circulars, codes, guidelines, etc.- The Commission may issue such directives, circulars, codes, guidelines or notifications as are necessary to carry out the purposes of this Ordinance and the rules and regulations made under this Ordinance.”

14. Amendment of Ordinance XLVII of 1984. The following further amendments shall be made in the Companies Ordinance, 1984 (XLVII of 1984), namely:-

(1) in section 158,

(a) in sub-section (1), for the word “three” the word “four” shall be substituted; and

(b) in sub-section (4),

(i) in clause (a), for the word “twenty”, the word “fifty” shall be substituted, and for the word “fifty” the words “five hundred” shall be substituted; and

(ii) in clause (b), for the word “ten”, the words “one hundred” shall be substituted;

(2) in section 187,

(a) in clause (h), in sub-clause (iv), after the semicolon the word “and” shall be omitted;

(b) in clause (j), the words “member of a Stock Exchange” shall be omitted and for the words “member”, occurring for the second time the words and comma “person or is a sponsor, director or officer of a corporate brokerage house” shall be inserted; and

(c) after the proviso, the following new proviso shall be added, namely:-

“Provided further that the prohibition contained in clause (j) shall not apply where the company is a stock exchange.”;

(3) in section 206, in sub-section (2),

(a) in clause (b), the word “and”, at the end, shall be omitted; and

(b) in clause (c) for the full stop, at the end, a semicolon shall be substituted and thereafter the following new clauses shall be inserted, namely:-

“(d) an agreement or contract with an NBFC licensed to undertake asset management services in relation to an investment company registered with the Commission; and

(e) an agreement or contract with an NBFC licensed as a venture capital company in relation to a fund registered with the Commission.”;

(4) in section 208, in sub-section (2A), in clause (b), after the word “to” the words “such class of” shall be omitted;

(5) in section 233,

(a) in sub-section (1),for the word “three” the word “four” shall be substituted;

(b) in sub-section (4),

(i) after the word “shall”, occurring for the first time, the words “in the form and manner specified by the Commission” shall be inserted; and

(ii) the words “the registered address of” shall be omitted;

(6) in section 251, in sub-section (1), for the words “forty-five days of the declaration in the case of a listed company and within thirty days in the case of any other company”, the words “such time as specified by the Commission” shall be substituted;

(7) in section 282G, in sub-section (2), after the word “rules”, wherever occurring, the words “or regulations” shall be inserted;

(8) in section 282J, in sub-section (2), after the word “rules” the words “or regulations” shall be inserted;

(9) in section 282K, in sub-section (1), after the word “rules” the words “or regulations” shall be inserted; and

(10) in section 282M, in sub-section (1), after the word “rules” the words “or regulations” shall be inserted.

15. Amendments of Finance Act 1989 (V of 1989). The following further amendment shall be made in Finance Act 1989 (V of 1989), namely:

(1) In section 7,

(a) in sub-section (1), for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that in case of a bank, the capital value tax shall be paid when general power of attorney is used to enforce the mortgage of property offered as collateral for obtaining loan.”;

(b) for clause (e) the following shall be substituted, namely:

“(e) urban area” means area falling within the limits of

(i) the Islamabad Capital Territory;

(ii) a Cantonment Board;

(iii) the rating areas as defined under the Urban Immovable Property Act, 1958 (W.P V of 1958) as in force in Punjab, NWFP, Sindh and Balochistan except where the rate under section 117 of the respective Provincial Local Government Ordinance, 2001 is zero;

(iv) in addition to (iii) up to forty kilometres from the outer limits of the Cantonment Boards in Karachi and up to forty kilometres from the notified rated areas of Karachi City District;

(v) in addition to (iii) up to thirty kilometres from the outer limits of the Cantonment Boards in Lahore and Faisalabad and up to thirty kilometres from the notified rated areas of Lahore and Faisalabad City District;

(vi) in addition to (iii) in all cases other than Karachi, Lahore and Faisalabad up to ten kilometres from the outer limits of the Cantonment Boards and up to ten kilometres from the notified rated areas; and

(vii) such areas the Federal Board of Revenue may, from time to time, by notification in the official Gazette, specify.”

16. Amendments of the Sales Tax Act, 1990. In the Sales Tax Act, 1990, the following further amendments shall be made, namely:-

(1) in section 2,

(i) for sub-section (2A), the following shall be substituted, namely:-

“(2A) “arrears”, in relation to a person, means, on any day, the sales tax due and payable by the person under this Act before that day but which has not yet been paid,”; and

(ii) for clause (3), the following shall be substituted, namely:

“(3) associates (associated persons)” means,

(i) subject to sub-clause (ii), where two persons associate and the relationship between the two is such that one may reasonably be expected to act in accordance with the intentions of the other, or both persons may reasonably be expected to act in accordance with the intentions of a third person;

(ii) two persons shall not be associates solely by reason of the fact that one person is an employee of the other or both persons are employees of a third person;

(iii) without limiting the generality of sub-clause (i) and subject to sub-clause (iv), the following shall be treated as associates, namely:

(a) an individual and a relative of the individual;

(b) members of an association of persons;

(c) a member of an association of persons and the association, where the member, either alone or together with an associate or associates under another application of this section, controls fifty per cent or more of the rights to income or capital of the association;

(d) a trust and any person who benefits or may benefit under the trust;

(e) a shareholder in a company and the company, where the shareholder, either alone or together with an associate or associates under another application of this section, controls either directly or through one or more interposed persons

(i) fifty per cent or more of the voting power in the company;

(ii) fifty per cent or more of the rights to dividends; or

(iii) fifty per cent or more of the rights to capital; and

(f) two companies, where a person, either alone or together with an associate or associates under another application of this section, controls either directly or through one or more interposed persons

(i) fifty per cent or more of the voting power in both companies;

(ii) fifty per cent or more of the rights to dividends in both companies; or

(iii) fifty per cent or more of the rights to capital in both companies.

(iv) two persons shall not be associates under clause (a) or (b) of sub-clause (iii) where the Collector is satisfied that neither person may reasonably be expected to act in accordance with the intentions of the other.

(v) In this clause, “relative” in relation to an individual, means

(a) an ancestor, a descendant of any of the grandparents, or an adopted child, of the individual, or of a spouse of the individual; or

(b) a spouse of the individual or of any person specified in clause (a).”;

(iii) clause (3A) shall be renumbered as clause (3AA) and before clause (3AA), renumbered as aforesaid, the following shall be inserted, namely:-

“(3A) “association of persons” includes a firm, a Hindu undivided family, any artificial juridical person and any body of persons formed under a foreign law, but does not include a company;”;

(iv) for clause (4), the following shall be substituted, namely:

“(4) “Board” means the Federal Board of Revenue established under section 3 of the Federal Board of Revenue Act, 2007;”;

(v) clause (5AA) shall be renumbered as (5AAA) and before clause (5AAA), renumbered as aforesaid, the following shall be inserted, namely:-

“(5AA) “company” means-

(a) a company as defined in the Companies Ordinance, 1984 (XL VII of 1984);

(b) a body corporate formed by or under any law in force in Pakistan;

(c) a modaraba;

(d) a body incorporated by or under the law of a country outside Pakistan relating to incorporation of companies;

(e) a trust, a co-operative society or a finance society or any other society established or constituted by or under any law for the time being in force; or

(f) a foreign association, whether incorporated or not, which the Board has, by general or special order, declared to be a company for the purposes of the Income Tax Ordinance 2001 (XLIX of 2001);

(vi) for clause (6B), the following shall be substituted, namely:-

“(6B) “default surcharge” means the default surcharge levied under section 34;”;

(vii) in clause (9), for the words, “Federal Government”, the word “Board”, shall be substituted;

(viii) after clause (11), the following new clause shall be inserted, namely:-

“(11A) “firm” means the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all;”;

(ix) in clause (13) the word “lawfully” shall be omitted;

(x) for clause (14), the following shall be substituted, namely:

“(14) “input tax”, in relation to a registered person, means-

(a) tax levied under this Act on supply of goods to the person;

(b) tax levied under this Act on the import of goods by the person;

(c) in relation to goods or services acquired by the person, tax levied under the Federal Excise Act, 2005 in sales tax mode as a duty of excise on the manufacture or production of the goods, or the rendering or providing of the services; and

(d) Provincial sales tax levied on services rendered or provided to the person;

(xi) for clause (20), the following shall be substituted, namely:

“(20) “output tax”, in relation to a registered person, means-

(a) tax levied under this Act on a supply of goods, made by the person;

(b) tax levied under the Federal Excise Act, 2005 in sales tax mode as a duty of excise on the manufacture or production of the goods, or the rendering or providing of the services, by the person;

(c) Provincial sales tax levied on services rendered or provided by the person;”

(xii) for clause (21), the following shall be substituted, namely:

“(21) “person” means,

(a) an individual;

(b) a company or association of persons incorporated, formed, organized or established in Pakistan or elsewhere;

(c) the Federal Government;

(d) a Provincial Government;

(e) a local authority in Pakistan; or

(f) a foreign government, a political subdivision of a foreign government, or public international organization;”;

(xiii) after clause (22), the following new clause shall be added, namely:-

“(22A) “Provincial sales tax” means tax levied under.-

(a) the Balochistan Sales Tax Ordinance, 2000 (I of 2000);

(b) Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001);

(c) the Punjab Sales Tax Ordinance, 2000 (Pb. Ord. II of 2000);

(d) the North West Frontier Province Sales Tax Ordinance, 2000 (III of 2000); and

(e) the Sindh Sales Tax Ordinance, 2000 (VIII of 2000);”;

(xiv) clause (28A) shall be omitted;

(xv) clause (29A) shall be renumbered as (29AA) and before clause (29AA), renumbered as aforesaid, the following shall be inserted, namely:-

“(29A) “sales tax” means-

(a) the tax, additional tax, or default surcharge levied under this Act;

(b) a fine, penalty or fee imposed or charged under this Act; and

(c) any other sum payable under the provisions of this Act or the rules made there under;”;

(xvi) in clause (31), for the word “resemble”, the word “resembles” shall be substituted;

(xvii) for clause (33), the following shall be substituted, namely:

“(33) “supply,” means a sale or other transfer of the right to dispose of goods as owner, including such sale or transfer under a hire purchase agreement: Provided that the Federal Government, may by notification in the official Gazette, specify such other transactions which shall or shall not constitute supply:”;

(xviii) for clause (34), the following shall be substituted, namely:

“(34) “tax”, unless the context requires otherwise, means sales tax;”;

(xix) for clause (35), the following shall be substituted, namely:

“(35) “taxable activity”, means any economic activity carried on by a person whether or not for profit, and includes-

(a) an activity carried on in the form of a business, trade or manufacture;

(b) an activity that involves the supply of goods, the rendering or providing of services or both to another person;

(c) a one-off adventure or concern in the nature of a trade; and

(d) anything done or undertaken during the commencement or termination of the economic activity, but does not include-

(a) the activities of an employee providing services in that capacity to an employer;

(b) an activity carried on by an individual as a private recreational pursuit or hobby; and

(c) an activity carried on by a person other than an individual which, if carried on by an individual, would fall within clause (b).”;

(xx) in clause (43), for semi colon, occurring first time, a comma shall be substituted;

(xxi) for clause (44), the following shall be substituted, namely:

“(44) “time of supply,” in relation to,

(a) a supply of goods, other than under hire purchase agreement, means the time at which the goods are delivered or made available to the recipient of the supply;

(b) a supply of goods under a hire purchase agreement, means the time at which the agreement is entered into; and

(c) services, means the time at which the services are rendered or provided;”;

“(44A) “trust”, means an obligation annexed to the ownership of property and arising out of the confidence reposed in and accepted by the owner, or declared and accepted by the owner for the benefit of another, or of another and the owner, and includes a unit trust;

“(44AA) “unit trust”, means any trust under which beneficial interests are divided into units such that the entitlements of the beneficiaries to income or capital are determined by the number of units held”; and

(xxii) in clause (47), the comma and the words”, and a person who in addition to making retail supplies is engaged in wholesale business” shall be omitted.

(2) in section 3,-

(a) for the word “fifteen”, wherever occurring, the word “sixteen” shall be substituted; and

(b) sub-section (4) shall be omitted;

(3) section 3AA shall be omitted;

(4) in section 7, in sub-section (1), for the proviso, the following shall be substituted, namely:-

“Provided that where a registered person did not deduct input tax within the relevant period, he may claim such tax in the return for any of the six succeeding tax periods.”;

(5) in section 8, in sub-section (1), in clauses (a), (b) and (ca) after the word “goods” the words “or services” shall be inserted;

(6) in section 8B, in sub-section (1), in the first proviso, the words “after the start of production of a new unit”, shall be omitted;

(7) in section 10, in sub-section (1), for the first proviso, the following shall be substituted, namely:-

“Provided that in case of excess input tax against supplies other than zero-rated or exports, such excess input tax may be carried forward to the next tax period and shall be treated as input tax for that period and the Board may, subject to such conditions and restrictions as it may impose, by notification in the official Gazette, prescribe the procedure for refund of such excess input tax;”;

(8) in section 11, in sub-section (4),

(a) after the word “given”, the words “within five years” shall be inserted; and

(b) in the proviso, for the word “ninety”, occurring twice, the words, “one hundred and twenty”, shall be substituted;

(9) in section 13, in sub-section (2), in clause (a), after the word “or” occurring for the first time, the words “import or supply of” shall be inserted;

(10) in section 25, in sub-section (2), in the proviso, for the full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be inserted, namely:-

“Provided further that nothing in this sub-section shall bar the sales tax officer from conducting audit of the records of the registered person if the same were earlier audited by the office of the Auditor-General of Pakistan”;

(11) in section 26, in sub-section (3), for the word “ninety”, the words “one hundred and twenty”, shall be substituted;

(12) section 26AA shall be omitted;

(13) in section 30, after clause (f), the following new clause shall be inserted, namely:-

“(ff) a Senior Auditor of Sales Tax;”;

(14) section 32AA shall be omitted;

(15) in section 33,

(a) the brackets and figure “(1)”, appearing for the first time, shall be omitted; and

(b) in the TABLE, in column (1), serial number 20 and the entries relating thereto in columns (2) and (3) shall be omitted;

(16) in section 34, in sub-section (1),

(a) in clause (a),

(i) the words and comma “for the first six months of default,” shall be omitted; and

(ii) after the word “one”, the words “and half” shall be inserted;

(c) after semi colon at the end, the word “and” shall be added; and

(ii) clause (b) shall be omitted;

(17) in section 36, in sub-section (3), in the proviso, for the word “ninety”, occurring twice, the words, “one hundred and twenty”, shall be substituted;

(18) in section 45A, in sub-section (2), for the words, brackets and figure “sub-section (1)”, the words “this section”, shall be substituted;

(19) in section 45-B, in sub-section (2), in the first and second provisos, for the word, “ninety”, occurring twice, the words, “one hundred and twenty”, shall be substituted;

(20) in section 46,

(a) for sub-section (1), the following shall be substituted, namely:-

“(1) Any person including an officer of Sales Tax not below the rank of an Additional Collector, aggrieved by any order passed by

(a) the Collector of Sales Tax (Appeals) under section 45B,

(b) the Collector of Sales Tax through adjudication or under any of the provisions of this Act or rules made there under,

(c) the Board under section 45A, may, within sixty days of the receipt of such decision or order, prefer appeal to the Appellate Tribunal.”;

(b) in sub-section (7), for the words, “six”, the word, “eight”, shall be substituted;

(c) in sub-section (9),

(i) in clause (a), for the words “fifteen hundred thousand”, the words “ten million” shall be substituted; and

(ii) in clause (b), for the words “fifteen hundred thousand”, the words “ten million” shall be substituted;

(21) in section 47A, after sub-section (4), the following new sub-section shall be inserted, namely:

“(4A) Notwithstanding anything contained in sub-section (4), the Chairman may on the application of an aggrieved person, for reasons to be recorded in writing, and on being satisfied that there is an error in order or decision may pass such order as he deems just and equitable.”;

(22) section 50 shall be numbered as sub-section (1) of that section and after sub-section (1), renumbered as aforesaid, the following new sub-section shall be added, namely:-

“(2) All rules made under sub-section (1) or any other provisions of this Act, shall be collected, arranged and published along with general orders and departmental instructions and rulings, etc, if any, at appropriat e intervals and sold to the public at reasonable price”;

(23) after section 58, the following shall be inserted, namely:-

“58A. Representatives. (1) For the purpose of this Act and subject to sub-sections (2) and (3), “representative” in respect of a registered person, means

(a) where the person is an individual under a legal disability, the guardian or manager who receives or is entitled to receive income on behalf, or for the benefit of the individual;

(b) where the person is a company (other than a trust, a Provincial Government, or local authority in Pakistan), a director or a manager or secretary or agent or accountant or any similar officer of the company;

(c) where the person is a trust declared by a duly executed instrument in writing whether testamentary or otherwise, any trustee of the trust;

(d) where the person is a Provincial Government, or local authority in Pakistan, any individual responsible for accounting for the receipt and payment of money or funds on behalf of the Provincial Government or local authority;

(e) where the person is an association of persons, a director or a manager or secretary or agent or accountant or any similar officer of the association or, in the case of a firm, any partner in the firm;

(f) where the person is the Federal Government, any individual responsible for accounting for the receipt and payment of moneys or funds on behalf of the Federal Government; or

(g) where the person is a public international organization, or a foreign government or political sub-division of a foreign government, any individual responsible for accounting for the receipt and payment of moneys or funds in Pakistan on behalf of the organization, government, or political sub-division of the government.

(2) Where the Court of Wards, the Administrator General, the Official Trustee, or any receiver or manager appointed by, or under, any order of a Court receives or is entitled to receive income on behalf, or for the benefit of any person, such Court of Wards, Administrator General, Official Trustee, receiver, or manager shall be the representative of the person for the purposes of this Act.

(3) Subject to sub-section (4), where a person is a non-resident person, the representative of the persons for the purpose of this Act for a tax year shall be any person in Pakistan:

(a) who is employed by, or on behalf of, the non-resident person;

(b) who has any business connection with the non-resident person;

(c) from or through whom the non-resident person is in receipt of any income, whether directly or indirectly;

(d) who holds, or controls the receipt or disposal of any money belonging to the non-resident person;

(e) who is the trustee of the non-resident person; or

(f) who is declared by the Collector by an order in writing to be the representative of the non-resident person.

(4) No person shall be declared as the representative of a non-resident person unless the person has been given an opportunity by the Collector of being heard.

58B. Liability and obligations of representatives. (1) Every representative of a person shall be responsible for performing any duties or obligations imposed by or under this Act on the person, including the payment of tax.

(2) Subject to section 58 and sub-section (5) of this section, any tax that, by virtue of sub-section (1), is payable by a representative of a registered person shall be recoverable from the representative only to the extent of any assets of the registered person that are in the possession or under the control of the representative.

(3) Every representative of a registered person who pays any tax owing by the registered person shall be entitled to recover the amount so paid from the registered person or to retain the amount so paid out of any moneys of the registered person that are in the representative’s possession or under the representative’s control.

(4) Any representative, or any person who apprehends that he may be assessed as a representative, may retain out of any money payable by him to the person on whose behalf he is liable to pay tax (hereinafter in this section referred to as the “principal”), a sum equal to his estimated liability under this Act, and in the event of disagreement between the principal and such a representative or a person as to the amount to be so retained, such representative or person may obtain from the Collector a certificate stating the amount to be so retained pending final determination of the tax liability, and the certificate so obtained shall be his authority for retaining that amount.

(5) Every representative shall be personally liable for the payment of any tax due by the representative in a representative capacity if, while the amount remains unpaid, the representative

(a) alienates, charges or disposes of any moneys received or accrued in respect of which the tax is payable; or

(b) disposes of or parts with any moneys or funds belonging to the registered person that is in the possession of the representative or which comes to the representative after the tax is payable, if such tax could legally have been paid from or out of such moneys or funds.

(6) Nothing in this section shall relieve any person from performing any duties imposed by or under this Act on the person which the representative of the person has failed to perform.”

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

Budget termed agri-friendly, hike in GST criticised ​

Thursday, June 12, 2008

KARACHI: The Federal Budget 2008-09 has received a mixed response from the business community and industrialists, who have termed it a pro-agriculture budget with very little being offered to the trading and industrial sectors.

Prominent businessmen of Karachi considered the budget to be “most appropriate looking at the present economic conditions” but were highly critical of the one per cent hike in General Sales Tax (GST) which they claimed would lead to further increase in the cost of doing business.

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Karachi Chamber of Commerce and Industry (KCCI) had made special arrangements for viewing the budget speech at their respective headquarters where most of the important businessmen were present on Wednesday.

President of FPCCI, Tanveer Ahmed Sheikh said that the business sector had been “ignored whereas all the concentration had been paid to the agricultural sector.” He stated that no special incentives were granted in the budget for the trade and industries sector and this had disappointed him.

He welcomed imposing of duties on luxury items as it would reduce imports of ostentatious products which created an imbalance in the Balance of Trade. He also welcomed minimum wage announcement and the Benazir Income Support Program.

President of KCCI, Shamim Ahmed Shamsi was of the view that this was the best possible budget that could have been announced under the circumstances where inflation is creating a record of sorts and has led to higher poverty levels.

He said, “looking at the budget as a Pakistani, I think it is agreeable as our first priority should be to control the soaring food inflation and that is what the budget has tried to do. There are no incentives for the industry as it has turned out to be an agricultural based budget.”

My only concern is that though revenue collection for the government would increase following 16 percent GST, the cost of doing business is also going to rise significantly which is once again going to be a challenge since we would remain impotent to provide the best products at best prices to the consumers and would also continue to remain uncompetitive in exports,” Shamsi continued.

He added that another of his concern was the promise of uninterrupted electricity that is going to be offered to the textile sector, which seems unattainable to him as there is an extreme shortage of power supply in the country.

Leader of business community, Siraj Kassam Teli said a few days were needed to get a clearer picture of the budget and to witness its impact, as it was essential to see where the exact raise in duties and taxes had been made before commenting on the situation.

He expressed that the business community may accept the rise in GST, keeping in mind the current economic situation but it would lead to dire consequences in the long run and hence, he said, it was advised to the government to recall their decision and instead reduce the GST to 10-12 percent.

Teli added that one positive move was the promise of 2200mw electric supply in nine months, which he personally doubted would ever materialize, but nevertheless welcomed the move.

Former president of KCCI, Zubair Motiwala criticized the little attention that had been paid to the textile sector in the budget, “no major steps were taken to uplift the sector and instead far fetched claims have been made which are practically not implemental.”

He lauded the government for cut in assembly and senate budgets and the promise it has made to provide an additional thousand rupees to the salary of the poor people.

He said, “as an industrialist, I say that the government should not look at us or investors and should only concentrate on the poor people and the rising food inflation. Long term planning is extremely important and the government should further subsidize the agricultural sector and therefore we welcome this budget.”

Preisdent of Alliance of Market Association, Atiq Mir voiced that the budget seemed to be aimed towards the army, feudal and investors and the cottage industries and small and medium traders were the most badly ignored sectors in the budget.

He commented that this year’s budget was like previous ones, “it is taking more from us in form of higher taxes and duties and giving nothing in return.” He added that though the budget promised easier loan policies for small traders, it was only on paper and the reality remained that obtaining loans were the most tedious tasks for them.

Mir lauded the Benazir Income Support Program and said that this was the only positive step of the government that would be highly beneficial for the poorest of the poor.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

Budget widely acknowledged as ‘pro-poor’ ​

Thursday, June 12, 2008

LAHORE: Industrialists have welcomed the federal budget, terming it as ‘pro poor’ and ‘poor friendly’ with focus on agriculture sector, which is crucial for sustainable economic development of the country.

In Lahore, industrialists as per their traditional practice, gathered at Lahore Chamber of Commerce and Industry (LCCI) and soon after the budget speech of the federal minister for finance Syed Naveed Qamar, appreciated it, adding that in such an economic scenario, the government had presented the best budget.

During the budget speech, they also thumped the desks on various decisions, especially in the announcements of increase in pensions, Benazir Income Support Programme, abolishing 15 per cent duty from CNG buses, and steps taken for energy sector and others.

Later, after the budget speech, the president of LCCI, Muhammad Ali Mian discussed the different features of the federal budget on the feedback of the chamber members.

However, the unanimous demand of the business community is to withdraw the 35 per cent cash margin on LC. “We are expecting that the government will revise the 35 per cent cash margin on LC, but its remains at a stand still,” Muhammad Ali said.

About the imposition of import duty on cellular and telephone devices, he said the government has discriminated on the imposition formula. He noted that the government has fixed import duty of Rs500 per device, which would badly affect the low cost mobile devices.

Talking about the energy saver lamps, he said that it is a good omen that the government has withdrawn all the duties from it, which showed that the government was committed to its energy saving programme. “However, a comprehensive policy is needed to bail out the country from its energy deficient state, as both industry and agriculture have been facing an acute shortage of energy,” he mentioned. Muhammad Ali said that the government should also zero rate the imported raw material for packaging industry. He mentioned that the government had not shed light on generators. For Rs1250 billion revenue generation, the government needs political stability, improved law & order situation and to reduce the electricity shortage, he said, adding that otherwise the government would not be able to achieve its revenue generation targets. The industrialists also appreciated the government’s effort for cutting down its non development expenditures, but strongly criticized the increase in central excise duty on cement. The business community appreciated the government’s decision to impose tax on real estate sector, saying that it has great potential for tax.

Chairman PIAF, Mian Abuzar Shad said that the government had not focused on business courts, as there were over 1.5 million cases pending. He noted that the government had not pointed out the allocation of funds for Kalabagh dam, which showed the apathy of the government towards KBD.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

'Resource-starved' Rs 2.01 trillion Budget slashes subsidies, raises salaries ​

ISLAMABAD (June 12 2008): Finance Minister Syed Naveed Qamar, on Wednesday unveiled a Rs 2.01 trillion taxes-laden federal budget for 2008,09, with some relief for the poor and the salaried class people. In his budget speech in the National Assembly, the minister presented the details of budgetary measures to be taken in next fiscal year for a quick recovery of the ailing economy.

-- Additional tax impact of Rs 84 billion

-- 5% FED on motor cars

-- FED in VAT mode 16%

-- Excise on telecom services raised to 21%

-- FED on cement up by Rs 150/tonne

-- 10% custom duty hike on non-essential imports

-- I/Tax exemption limit raised from Rs 150 to 180 K for salaried men.

For women exemption raised to Rs 240K

-- 0.5% minimum tax on turnover withdrawn

-- No change in tax regime on listed shares

-- 20% rise in pay & pension

-- 2% hike in NSS rates

-- 10% advance tax on electricity bills

-- CNG buses exempted from duty;

-- 18 drugs for cancer/heart treatment made duty-free.

The increased target for FBR set at 1.25 trillion against Rs 990 billion revised estimates of 2007-08. Duty on import of 300 items has been increased by 5 percent. Imported and locally made cars, travelling, mobile phones communication services will cost more.

GDP growth target set at 5.5 percent against 5.8 percent of the outgoing fiscal. Inflation rate at 12 percent. Fiscal deficit and current account deficit projected at 4.7 percent and 6 percent of GDP, respectively.

The government employees and pensioners will get 20 percent increase in their basic salaries and pensions. Minimum pension has been increased from Rs 300 to Rs 2000. Adhoc government employees up to grade 15 to be regularised. Travel allowance for 1-19 BPS increased by 100 percent. Medical allowance for grade 1 to 16 is increased to Rs 500 per month.

The poor will be issued Benazir cards for special relief of Rs 1000 per month. NADRA's record will be used to identify the poor for the relief. Working women will get incentive in their income tax limit. One million small houses will be constructed for the government employees in 2008-09.

The minister announced a cut in subsidies to curtail borrowing from commercial banks at a manageable level. Non-development expenditure except salaries has been frozen. Public Sector Development Programme (PSDP) increased to Rs 549.7 billion. Defence budget increased by Rs 25 billion to offset inflationary affect.

Tax on houses and property deals has been increased. A substantial increase in social sector allocation has also been announced. Education sector allocation remained at the last year's level. The minister added that reduction in fiscal deficit, rationalisation of subsidies, build-up up of forex reserves and removal of bottlenecks for economic growth were among the government's top priorities for the next fiscal year.

He said textile industry will get round the clock power supply whereas other key industries and tubewells will have electricity for more hours. He said wheat support price to be enhanced in August-September for wooing the growers for better output and a cold chain to be established for produce and better value and return to the growers.

The Minister added that subsidy on DAP has been doubled to help the growers get more farm productivity. The Finance Minister said NFC award will be reconstituted as soon as nominations from the provinces are received.

Business Recorder [Pakistan's First Financial Daily]

 

[Interceptor]

National grid has 1,500MW additional power, says Ashraf​

* Minister says 400MW being saved through conservation programmes​

ISLAMABAD: The government has added 1,500 megawatts (MW) of additional power to the national grid and there will be no load shedding for the major industrial and agricultural sectors, Federal Water and Power Minister Raja Pervez Ashraf said on Tuesday.

He told reporters after the inaugural session of the 2nd Japan-SAARC Symposium ‘Energy and Connectivity’ that load shedding for domestic consumers would also be reduced due to improvements in hydroelectric power generation and would be completely eliminated from next year.

Ashraf said 1,500MW had been added to the system by upgrading and enhancing the existing generation capacity of independent power producers and generation companies. He said the government was fully committed to eliminating the menace of load shedding by adopting a rational policy and setting up new power plants on a fast track basis to minimise ‘miseries’ faced by the population.

Conservation: He said infrastructure was being developed to import 1,000MW from Iran. To questioning, he said that 400MW was being received through conservation. He also urged traders to implement the conservation plan approved by the government as a national service. Earlier, the minister informed the participants of the symposium that the government’s strategy for the power sector depended on the implementation of its “action plan”, which included harnessing indigenous hydroelectric and coal resources and implementing wide-ranging power sector reforms.

Ashraf said short-term measures (from 2008-2011) should add generation capacity of 7,067MW. The medium term plan (2011-2020) focuses on maximising coal-based and mega-hydroelectric (15,000MW) power generation projects. He said the government was moving ahead with power import projects of around 1,000MW each from Iran and Tajikistan for long-term projects. The government is also planning to provide resources for producing more nuclear power generation in co-operation with China to achieve a medium-term target of 3,000MW, he added.

The minister said that being a member of the South Asian Association for Regional Co-operation, Economic Co-operation Organisation and the Shanghai Co-operation Organisation, Pakistan was fully committed to cross-border energy co-operation. The country would take immediate strategic measures to enhance energy security in the region, he added.

Also present at the symposium, former Petroleum minister Usman Aminuddin said that the Iran-Pakistan-India (IPI) gas pipeline project could not become a reality without building trust between India and Pakistan. He said India could benefit with $60 billion from the IPI gas pipeline project.

However, he added, the project was being delayed due to American pressure on India. He also hinted that the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline deal could not be completed until Turkmenistan presented an evaluation report about its gas reserves.

Daily Times - Leading News Resource of Pakistan

Woooohooooo yeah Come on Webby, this is probably the best news I heard yet. This has to be a sticky.

 

[Neo]

Rs 549.7 billion set aside for PSDP ​

ISLAMABAD (June 12 2008): The budget for fiscal year 2008-09 envisages an allocation for Public Sector Development Programme (PSDP) which is higher than that proposed in the Annual Development Plan as prepared by the Planning Commission. This dichotomy is unprecedented and is surprising given the severe resource constraints that the country is operating within.

A total of Rs 549.7 billion is earmarked for Public Sector Development Programme (PSDP) 2008-09 compared to the originally proposed Rs 520 billion PSDP in the current fiscal year, as announced by Finance Minister Naveed Qamar in his budget speech.

The ADP envisages a total development outlay of 755.7 billion if injections to the following public sector corporations such as Wapda, CAA, KPT, gas companies and others are included.

Interestingly, the PSDP size as given in the Annual Development Plan (ADP) 2008-09 is Rs 541 billion if calculated without the allocation of Rs 26.7 billion for Earthquake Rehabilitation and Reconstruction Authority (Erra) in the next fiscal year compared to Rs 35 billion in the current fiscal year. There is confusion whether the development expenditure figure 549.7 billion revealed by the finance minister in his speech included the allocation of Erra.

According to ADP, the allocation for federal development programmes is Rs 371 billion in the next fiscal year against Rs 335 billion for the same in the current fiscal year. The allocation for provincial development programmes is Rs 170 billion in next fiscal year against Rs 150 billion in the current fiscal year.

The ADP worked out the operational shortfall at Rs 25 billion in the federal programmes and Rs 20 billion in the provincial programmes for next fiscal year. If the operational shortfall of 25 billion is deducted from federal programmes, the actual allocation comes to Rs 346 billion. Similarly, the operational shortfall of Rs 20 billion if deducted from provincial programmes, the actual allocation would come to Rs 150 billion.

The Planning Commission estimates suggest that PSDP size is at 4.4 percent of GDP with an increase of 11 percent over 2007-08. The Commission also estimated that net amount available during 2007-08 after accounting for the operational shortfall is Rs 300 billion.

Out of the net available amount, Rs 250-260 billion are expected to be spent during the current fiscal year. The Commission is of the view that provinces are likely to perform better and their expenditure may exceed Rs 150 billion.

Under the sectoral distribution of the PSDP 2008-09, an amount of Rs 165 billion or 44 percent of the total PSDP has been made for infrastructure, Rs 188 billion or 50 percent for social sector, Rs 18 billion or 4.8 percent for agriculture and industry.

The allocation for water resources in the next fiscal year is Rs 62.42 billion compared to Rs 63.5 billion in the current fiscal year. The power sector will get Rs 14.15 billion in the next fiscal year compared to Rs 20.6 billion in the current fiscal year.

Pakistan Atomic Energy Commission (Paec) will get Rs 15.3 billion in the next fiscal year compared to Rs 12.21 billion in the current fiscal year. Communication Division including NHA will get Rs 36.82 billion in 2008-09 compared to Rs 29.61 billion in the current fiscal year. Railways division will get Rs 11.28 billion in next fiscal against Rs 11.64 billion in the current fiscal year.

Business Recorder [Pakistan's First Financial Daily]