What's new

Pakistan Economy - News & Updates - Archive

Status
Not open for further replies.
Afghan trade team to import Pak-made diesel engine


LAHORE, Dec 8 (APP): A high level private sector trade delegation from Afghanistan will visit Lahore after Eid ul Azha to import Pakistan made diesel engines for agricultural purpose.

Chief executive officer KAM Engineering, Khalid Saeed Khan told APP here Monday that the Pakistan made KAM diesel engines have become very popular in Afghanistan, compared to all brands of those made in India, and are being successfully used for agricultural purposes.

He said the Afghan team will visit the state of the art plant and see the engine assembly process, using indigenous technical know-how and expertise, which has helped to control the price of the product with minimum overhead expenses.

In their war torn country, the Afghanis are now inclined to bring maximum area under cultivation to meet the ever increasing need of foodgrains. For this purpose, they need quality agri inputs and implements, and Pakistan made products offer the guarantee to compete in terms of quality and price, said the firm’s Director Marketing, Sh Muhammad Amin.
 
.
Plan worth Rs1.7 billion for advancement of industrial sector


SIALKOT, December 7 APP: - Punjab government has formulated a well-knitted plan costing Rs.1.70 billion for advancement of industrial sector and development of cottage industries in of the Province, official sources told APP here on Sunday.

Out of this total Rs.1.30 billion would be spent on the development of industrial sector while Rs.400 million would be mobilized on cottage industry for further accelerating the pace of economic activities with the concept of increasing the export-volume in the Punjab.

Under the programme special attention would be accorded on the establishment of maximum industries in private sector for creating wide employment opportunities for jobless educated and skilled persons in the Punjab. The setting up of industrial states would also help in mitigating chances of rapid rural migration towards urban areas of the Province.

The government aims to extend full cooperation and facilities to the foreign and overseas Pakistanis investors aimed at ensuring maximum Direct Foreign Investment (***) in the Punjab. While exporters and manufacturers were being motivated for bringing innovation and diversification in their products cope with global market more easily sources added.

In order to facilitate the SMEs the Punjab government would soon initiate a” Micro Finance” loaning scheme with an amount of Rs.1 billion during current fiscal period for the development of cottage industries and creating self-employment opportunities in the Province.
 
.
100 percent surge recorded in 2007-08 fiscal deficit

RIZWAN BHATTI
KARACHI (December 09 2008): All balance indicators of fiscal performance depicted sudden deterioration in last fiscal year 2007-08, resulting in record increase of over 100 percent fiscal deficit, to Rs 777 billion, highest during last ten years. Overall fiscal deficit surged by 105 percent from Rs 377.5 billion in fiscal year 2007 to Rs 777.2 billion in fiscal year 2008.

The State Bank of Pakistan said in its annual report for 2007-08 that deceleration in revenue growth, coupled with a strong rise in total expenditures, driven by exceptionally large interest payments and current subsidies, caused serious deterioration in all key fiscal performance indicators during FY08.

The year saw the fiscal deficit as a percentage of GDP rise to 7.4 percent, highest level of budget deficit since FY99 and against the budget target of 4.0 percent of GDP for the year and compared to 4.3 percent of GDP witnessed in the preceding year.

The report said the growth of deficit reflected a fall in revenue growth and acceleration in total expenditures. Revenue balance moved firmly into deficit during FY08, reaching 3.4 percent of GDP, against the budgeted surplus of 1.0 percent of GDP. "This is truly troubling since the Fiscal Responsibility and Debt Limitation (FRDL) Act requires the revenue balance to be at least zero, as a percent of GDP, by FY08 and beyond", the report said.

Primary balance, as share of GDP, recorded a deficit of 2.7 percent in FY08 compared to a deficit of 0.1 percent in FY07. Despite large amount of interest payments, the worsening of primary balance was mainly attributable to high current expenditures.

Also, primary and revenue balances, measured as percentage of GDP, moved solidly into deficit during FY08, after hovering around zero in the preceding years. The report said that a quarter-by-quarter accumulation of budget deficit showed a particularly large imbalance in Q4-FY08. However, a substantial part of this oversized addition to fiscal deficit in Q4-FY08 represented the recognition of the liability accrued during all three preceding quarters of FY08 on account of unpaid price differential claims.

Even though tax revenues increased by a respectable 18.1 percent during FY08, as compared to the growth recorded in FY07, the rise lagged behind 23.1 percent growth budgeted for the year, it said.

This was mainly caused by a substantial shortfall in collection under direct taxes. Also, collection of surcharges on oil and gas witnessed considerable declines, (due to non-adjustment of domestic energy prices with rises in international oil prices) leading to significant deceleration in non-tax receipts.

Consequently, total revenues rose to Rs 1,499.4 billion during FY08, up by 15.5 percent compared to 20.6 percent growth realised in FY07, the report said.

The deceleration in total revenues, combined with a rise of 35.9 percent in total expenditures dictated a large jump in fiscal deficit during FY08. The increase in total expenditure during FY08 was fuelled by excessive current spending owing to interest payments, subsidies and defence expenditures.
 
.
China motorcycle parts customs valuation revised

SOHAIL SARFRAZ
ISLAMABAD (December 09 2008): The Directorate-General of Customs Valuation, Karachi, has issued revised customs values of motorcycle components and parts imported from China for accurate assessment of customs duty at the import stage. In this regard, the Directorate has issued a ''valuation ruling'' to the collectors of customs for implementation within the jurisdiction of their respective collectorates.

The ruling has been issued by the DV Valuation taking into account the viewpoint of local manufacturers and assemblers of Chinese motorcycles and importers of motor parts/components from China.

According to the ''valuation ruling'', the customs value of the motorcycle part/component Carburettor would be US$6.85/pc; motorcycle part/component Piston US$1.55/pc; motorcycle part/component Magneto Assy US$6.70/pc; motorcycle part/component CDI US$0.88/pc; and customs value on the import of motorcycle part/component Key Lock Set (of 5 pcs) would be US$2.86 per piece.

According to the ruling of DG Valuation, High Courts of Lahore and Sindh, had set aside DG Valuation orders regarding determination of customs value of motorcycle parts and components imported from China, decided under section 25A of the Customs Act, 1969. It was further ordered by the courts that value of the goods should be re-determined under section 25-A of the Act, within a period of two months strictly in accordance with the sequential order provided under section 25 of the Customs Act.

In compliance with the orders of High Courts, the valuation of parts/components of China origin motorcycle 70 cc was taken up in terms of section 25A of the Act and meetings were held with all stakeholders on, in sequel to the meetings earlier in the matter. The aforesaid meetings were attended by three types of stake holders, ie the importers, local assemblers and local manufacturers. During the meeting, it was decided with mutual consent of all the stake holders that, in the first instance, the valuation of the five items be taken up carburettor, piston, Magneto Assy, C.D.I. and Key Lock Set.

The three categories of stakeholders presented their detailed viewpoints on the valuation issue.

Local Manufacturers and Vendors:

The Local Manufacturers vehemently pleaded that the import values mentioned in the previous rulings may be enhanced for the following reasons. Firstly, prices of motorcycle parts depend largely on the weight thereof. Therefore, the valuation/assessment should be done on per piece and weight basis.

Secondly, the proceedings should be finalised in the light of data of past clearances instead of market enquiry: the provisions of sub-sections (5) and (6), and not sub-section (7), of the Act may be applied. Local manufacturers also handed in few sheets which, according to them, contained actual declared values of the above mentioned five items cleared from Customs House Karachi in the past.

Thirdly, the argument advanced by irrelevant persons and unregistered associations should not be entertained; only the genuine importers should be allowed to participate in the proceedings.

Fourthly, prices of motorcycle parts/components (particularly Carburettor) of China and Japan origin is the same as there is no difference in function and quality of the goods of the aforesaid two origins, though production cost of China origin goods is slightly lower. Fifthly, items like CDI unit and lock key set (of 5 pcs) are high technology items, and manufacturing cost of the same in the local vendor market was quite high. Therefore, the price of similar China origin goods has also to be quite high. They suggested import value of US$ 14.31, US$ 3.60, US$ 7.00, US$ 1.60 and US$ 4.31 for Carburettor, Piston, Magneto Assy, C.D.I. and Key Lock Set respectively.

The Assemblers of Chinese Motorcycles:

The second stakeholders in the matter were local assemblers of motorcycles of various Chinese brands. They have mainly submitted that the local manufacturers, manufacturing motorcycles under various Japanese brands under franchise arrangements have only one target and that target is to create monopoly in the market by way of driving other competitors out of the market.

In the past (ie before the assemblers of Chinese origin motorcycles had entered the market, they had literally fleeced the consumers by charging prices of their choice as there was no competition in the market. However, with the arrival of assemblers of Chinese origin motorcycles in the market the prices of even Japan origin motorcyc1e had significantly come down which meant that previously the local manufacturers were over-charging. Therefore, it was in the interest of the consumers that the assemblers of Chinese motorcycles should be allowed to survive in the market through creating a truly competitive atmosphere.

High Courts had clearly ordered that value of motorcycle parts/components be determined strictly in accordance with the provisions of section 25 of the Act and in light of the documentary evidence available on record.

The import price of Carburettor produced by Honda Japan is $11.00/pc while the price of same Carburettor produced in China is not over $4.00/pc. Therefore, the quality factor of Chinese and Japanese goods needs to be kept in consideration while determining value of Chinese origin Carburettor.

In any case, there is no justification for putting the value of US$13.00 on China origin Carburettor - whereas the same value is taken of Japan origin Carburettor which is totally unjustified: either the value of Japan origin Carburettor should by over US$24.00 or that of China origin should be US$6.00 as there was huge difference of quality and production costs in both countries besides the freight difference for Pakistani importers for importing goods from China and Japan; and they added that there could be no comparison between the cost of parts produced in China and Pakistan because raw material/scrap is imported in China from all sources of the world in greatest quantity at best prices, which results in cheaper cost of production, which is 10 percent against 90 percent in Pakistan. This is further supported with subsidies provided by the Chinese government to the tune of 38 percent.

The importers of motorcycle parts/components from China (MSPIDA):

The association stated that prices of motorcycle parts in China are factually low due to various reasons including low incidental charges/landed cost. For example, the actual market price of CDI unit, Lock Set and Carburettor in China is as low around Rs 120, 100 and 300 respectively arid the best quality Carburettor in China is available at $6.00/pc. They contended that the values previously notified by the Directorate General in the impugned orders were unjustified and contrary to the aforesaid ground reality. They emphasised that the business of the local manufacturers should not be supported by government departments at the cost of the importer and that the courts had viewed this aspect of the matter adversely, they added.

According to the DG Valuation, the local manufacturers pleaded that the values already notified may be enhanced instead of bringing down; the assemblers pleaded for downward revision of the impugned values, particularly that of carburettor which, they, should not be more than US$ 600 in any case and, the importers pleaded that import value of carburettor be determined @US$ 3.00.

The rival arguments have been duly considered in light of the orders of High Courts arid manner of valuation provided under section 25 of the Act. The transaction values declared by the importers in respect of the impugned five items have not been accepted by the clearance collectorates due to applicability of the previous valuation rulings issued by this Directorate General as well as due to incorrect declaration of particulars of the goods in the import documents.

For the same reasons, test values in terms of sub-section (5) and (6) of section 25 of the Act are not applicable in this ease. The purported evidences of past clearances provided by the representative of Atlas Honda have been examined at length. It has been found that shipments in most of those cases were made from Singapore and there is no evidence on record to the effect that the goods were of China origin. Therefore, keeping in view the aforesaid situation, the valuation method prescribed section 25 (7) of the Act has been applied in this case and findings of the market survey been relied upon.

The market survey has shown that there is a vast difference between the selling prices of China and Japan origin goods. Even the same brand goods manufactured in China are significantly low priced compared to the one produced in Japan. It has been further found that China origin parts are much inferior in quality appearance and weight compared to the Japan origin parts/components, though both perform the same function in 70 cc motorcycles, DG Valuation maintained.

For example, Japan origin Honda brand carburettor for 70 cc motorcycle is available in the local market @ Rs 1850/pc whereas China origin carburettor, supposedly performing the same function, is available at, as low a price as Rs 310/pc. Obviously, the aforesaid two items are not at par with each other in terms of qua1ity, durability appearance, guarantee etc. This is precisely the reason why value of China origin goods has been historically determined by this Directorate General in the region of 1/3rd of the Japan origin goods meant for the same function. For example, a difference of 66 percent m the valuation of automotive vehicle parts and engine bearing bushes has been maintained vide Valuation Ruling dated May 29 2008 and July 25, 2008 in China and Japan origin goods.

It is an established fact that the local manufacturers are themselves importing branded Japan origin carburettors in the range of US$ 13.00 and US$14.00 and they plead that unbranded and low quality carburettors imported by the assemblers from China should be assessed to duty/taxes at the same value. Clearly, such a plea is neither in consonance with the market realities nor the standards of valuation historically followed m this Directorate General.

Keeping in view the findings of market survey and the observations made above, the customs values of motorcycle components/parts are re-determined and revised, DG Valuation added.
 
.
Luxury cars 'sale permissions' sent to foreign office for verification

SOHAIL SARFRAZ
ISLAMABAD (December 08 2008): In a major development in the diplomatic cars scam, the Model Customs Collectorate (MCC), Rawalpindi, has provided all "sale permissions" of luxurious vehicles to the Ministry of Foreign Affairs for verification of documents.

Sources told Business Recorder on Sunday that the collectorate has taken up the matter with the Ministry of Foreign Affairs to check the authenticity of the sale permissions of Foreign Office used to clear diplomatic vehicles without payment of duties and taxes.

According to sources, the FBR special committee, headed by Dr Zubair Yousfani, Additional Collector of Customs, MCC, Rawalpindi, had made some major breakthrough while probing diplomatic cars scam where such luxurious vehicles were sold on fake documents.

The valuable data on diplomatic vehicles has been collected from various departments and embassies.

Now, all sales permissions issued by the Foreign Office would be verified, and action would soon be initiated against the owners of the luxurious vehicles.

Around 60 diplomatic luxurious vehicles have been illegally cleared by an organised gang on fake documents/NOC for availing exemption of duties and taxes causing a massive loss to national exchequer.

Under the relevant notification, the Ministry of Foreign Affairs has to issue authorisation for local sale, on payment of customs duty and taxes as per relevant schedule of the relevant notification depending upon the category of the country of origin of the diplomat based on reciprocity as determined by the Ministry of Foreign Affairs. The document has to be approved by Foreign Affairs Secretary with copy of each to FBR.

In view of the notification, the customs department would check the genuineness of the sales permissions with the help of Ministry of Foreign Affairs. Details showed that the FBR had constituted a committee to thoroughly probe the diplomatic cars scam where such luxurious vehicles were sold on fake documents in August 2008.

In October 2008, 5-6 vehicles were confiscated by the MCC, Rawalpindi, on the basis of confirmation made by the embassies, and FIRs were registered against the involved persons under section 32 of the Customs Act, 1969.

In November 2008, the customs department managed to collect relevant information from embassies and government departments to check registration of these vehicles. Sources said that once the Ministry of Foreign Affairs would verify all the sales permissions, confiscation of more vehicles is expected after verification in coming days.

The scrutiny of record showed that these 60 diplomatic vehicles were sold on fake NOCs for availing inadmissible exemption of duties and taxes. The embassies would also verify the actual names and addresses of the purchasers of these vehicles in question.
 
.
Prime Minister approves Rs 21.4 million for uplift schemes

BUREWALA (December 08 2008): Prime Minister, Yousaf Raza Gilani has accorded approval for the construction of soling and drainage schemes in NA-167 worth of Rs 21.4 million. MNA Chaudhary Nazir Ahmad Jatt disclosed this while talking to media personnel here on Sunday.

He further said that prime minister in his directive no. 347 dated 26-11-2008 has ordered Ministry of Finance in a Letter No JS (P) Elec/NA-167/D-463/47/SP-I/08 to release Rs 21.4 million during the current financial year out PWP-II 2008-2009 to the government of Punjab for onward transfer to district government of Vehari for the execution of the schemes.

He said that provincial government would ensure distribution of funds to executing agency by 8th December 2008 after completion of all formalities. He said that federal government has already released Rs 9.5 million under Peoples Works Programme-I (PWP 2008-09) on the instructions of President for 25 sanitation and road sector schemes proposed by the MNA Chaudhary Nazir Ahmad Jatt.

These schemes will be for the 25 cities and village areas of NA-167. While expressing his apprehension he said that some political elements wanted to sabotage the development process and eager to take advantage of the situation, but he would not allow anyone ruin his efforts. He further reconfirmed his commitment that whole city and its adjoining areas would be get provision of sui gas in the upcoming days.
 
.
Six development projects completed

KARACHI (December 08 2008): Six development projects have been completed while four are under progress in Sindh Health Department during the tenure of the present government. This was stated by Sindh Health Minister, Dr Sagheer Ahmed, while talking to people from different walks of life during his visit to Civil Hospital Hyderabad.

A statement issued here on Sunday said that he further pointed out that the schemes completed during the last eight months are renovation of CCU department at Civil Hospital Karachi, equipment for cancer center at SlUT Karachi, renovation of existing building of Chest Diseases Hospital Kotri, expansion and improvement of Services Hospital Hyderabad with addition of casualty ward and 10-bed maternity/paediatrics ward, up gradation of THQ Hospital Ghotki to the level of Civil Hospital by providing coronary care and dialysis unit and digital telephone exchange with underground cable wires at Chandka Medical College Larkana.

The Provincial Minister said that besides above complete projects, four development schemes are also under progress and include the renovation and improvement of Sindh Government Hospital Karachi, construction of 400-bed Hospital Karachi, safe blood transfusion reforms in Sindh and basic development needs programme in Sindh.

He further said that in addition, up-gradation of Taluka Headquarter Hospitals to the level of District Headquarter Hospital in seven districts are also under way which include Kamber, Tando Muhammad Khan, Tando Allahyar, Jamshoro, Kashmore, Matiari and Umerkot, besides establishment of Medical College at Mirpurkhas, expansion and improvement of 12 DHQ Hospital in Sindh, establishment of TB Sanitorium at Bado Jabal in District Dadu, revitalisation of teaching hospital and medical colleges in Sindh.

The minister said that the government is committed to provide basic health facilities to common people at their doorstep and taking revolutionary steps to achieve the desired goals.
 
.
Hiring of foreign experts for Diamer-Bhasha dam: Wapda accused of violating rules

MUSHTAQ GHUMMAN
ISLAMABAD (December 09 2008): The Water and Power Development Authority (Wapda) has been accused of violating World Bank and Pakistan Procurement Regulatory Authority (PPRA) rules in hiring International Panel of Experts (IPoE) for Diamer-Bhasha dam consultancy, official sources told Business Recorder.

The cause of dispute between Wapda and Finance Ministry was payment of foreign exchange to the international experts who visited Pakistan from time to time to review the detailed engineering design of the project.

These visits are included in the PC-II of the project, which had been approved by the Executive Committee of the National Economic Council (Ecnec) on September 27, 2003 at a cost of Rs 567.842 million, including foreign exchange component of Rs 170.714 million. So far, the experts have undertaken three visits.

Sources said that Wapda had approached the Ministry of Finance for release of foreign currency to meet the expenditure of two subsequent visits, in reply to which the Finance Ministry suggested that ex post facto approval of Ecnec should be sought to the agreement of all three visits of IPoE, so that the required foreign exchange could be released, as the consultancy agreement was not cleared by the Finance Ministry.

The Ministry of Water and Power had submitted following suggestions for consideration of the Ecnec:

Ex post facto approval by Ecnec may be granted to the agreements of three visits of experts of Daimer-Basha dam project, enabling Wapda to regularise the foreign currency payment for the second and third visits.

A special waiver may be granted to the consultancy and other agreements of large dams for prior clearance by Finance Ministry subject to observance of all codal formalities and requisite budgetary provision in local as well as foreign currency.

Sources said that Finance Division did not support the proposal of waiver from prior clearance, whereas it supported the proposal of grant of ex post facto approval of the agreement.

Sources said that original PC-II for detailed engineering design of Diamer-Bhasha dam was approved by Ecnec in its meeting in September 2003 at a cost of Rs 567.842 million including foreign exchange component of Rs 170.714 million. The PC-II was, however, revised due to inclusion of some leftover essential works which were approved by Ecnec in its meeting held on March 7, 2007 at a cost of Rs 1677.424 million including foreign exchange component of Rs 98.230 million.

They said that Wapda prior to the first visit of IPoE had approached Finance Division for release of $ 73,319, which was accordingly released. However, on May 13, 2006 the Finance Division wrote to Wapda that the consultancy agreement had not been cleared by Finance Division as per the decision of Ecnec of December 17, 1996. Therefore, ex post facto approval of Ecnec be sought.

Wapda replied that funds for the visits of IPoE were a part of the approved cost of the PC-II. Therefore, it was assumed that no further clearance/approval in respect of the visits of IPoE would be required.

The matter remained under correspondence with the Finance Division and, in the meantime, experts undertook second and third visits. These visits of experts were inevitable for technical review of the detailed engineering design as without them the overall work of the engineering design would have come to a halt, sources quoted Wapda Chairman as saying in the Ecnec meeting.

Sources said that Wapda also claimed that it was in the process of constructing large dams, which envisage a number of consultancy and other agreements involving foreign exchange components.

There is every possibility that processing of agreements for prior clearance of Finance Division would result in unnecessary delays which would directly affect the implementation of the projects of national importance, to be completed by year 2016. It is pertinent to point out that contracts in Wapda are awarded with the approval of the authority under Wapda Act, provision and a whole time Member (Finance) has been appointed by the GoP as member of the authority.

Wapda was of the view that requisite financial controls are thus inbuilt in the working of the Authority, requesting that a special waiver may be granted to the agreements of large dams for prior clearance by Finance Division, subject to observance of all codal formalities and requisite budgetary provision in local as well as foreign currency.
 
.
EU vows to boost political, trade ties with Pakistan

BRUSSELS (December 09 2008): The European Union vowed Monday to boost political and trade ties with Pakistan, a day after insurgents there torched nearly 200 vehicles destined to supply Nato forces in Afghanistan.

The EU "acknowledges the complex and urgent challenges Pakistan is facing, especially regarding the overall security situation and economic crisis," the bloc's 27 foreign ministers said in a statement after talks in Brussels.

"The European Union stands ready to strengthen bilateral relations with Pakistan and to look for possible ways of increasing its financial assistance to the country," it added. The raid came a day after about 250 heavily armed militants attacked two major terminals in Peshawar to destroy supplies bound for the Nato-led force in neighbouring Afghanistan.

And just hours before the EU statement Monday, a second raid near Peshawar destroyed nearly 100 more vehicles bound for Afghanistan. On the political front, an EU troika of senior officials will visit Islamabad soon, which French Foreign Minister Bernard Kouchner said could lead to an EU-Pakistan summit in the first half of 2009.

"There is a need to visit our Pakistani friends, through this troika, as quickly as possible," said Kouchner, whose country holds the EU's rotating presidency until the end of the month.

Cooperation would be boost in "trade and development, intercultural exchange, non-proliferation, human rights, migration, counterterrorism and radicalisation and education," said the ministers. Pakistan's battle against extremists, who have taken their war against Nato-led troops in Afghanistan on to their territory, has become a major concern. The EU's anti-terror co-ordinator Gilles de Kerchove is set to travel there in January. "The need for urgency is clear. The need to help the Pakistanis, under President (Asif Ali) Zardari, in their fight against terrorism is just as clear," Kouchner said.

The ministers also urged Islamabad to cooperate fully with investigations into the attacks in Mumbai last week, in which gunmen struck multiple targets, killing 163 people and wounding another 300.

The EU has sent some 500 million euros in aid to Pakistan since 1976, according to the European Commission, and has quadrupled its funding for the 2007-2010 period, with 50 million euros (65 million dollars) earmarked so far.

Brussels wants to target Pakistan's lawless border areas with Afghanistan with its aid, focusing on rural development, natural resources management, education and the development of human resources. "We will particularly be there in this frontline between Pakistan and Afghanistan because this is the poorest area," EU External Relations Commissioner Benita Ferrero-Waldner told reporters.
 
.

KARACHI (December 09 2008): All balance indicators of fiscal performance depicted sudden deterioration in last fiscal year 2007-08, resulting in record increase of over 100 percent fiscal deficit, to Rs 777 billion, highest during last ten years. Overall fiscal deficit surged by 105 percent from Rs 377.5 billion in fiscal year 2007 to Rs 777.2 billion in fiscal year 2008.

The State Bank of Pakistan said in its annual report for 2007-08 that deceleration in revenue growth, coupled with a strong rise in total expenditures, driven by exceptionally large interest payments and current subsidies, caused serious deterioration in all key fiscal performance indicators during FY08.

The year saw the fiscal deficit as a percentage of GDP rise to 7.4 percent, highest level of budget deficit since FY99 and against the budget target of 4.0 percent of GDP for the year and compared to 4.3 percent of GDP witnessed in the preceding year.

The report said the growth of deficit reflected a fall in revenue growth and acceleration in total expenditures. Revenue balance moved firmly into deficit during FY08, reaching 3.4 percent of GDP, against the budgeted surplus of 1.0 percent of GDP. "This is truly troubling since the Fiscal Responsibility and Debt Limitation (FRDL) Act requires the revenue balance to be at least zero, as a percent of GDP, by FY08 and beyond", the report said.

Primary balance, as share of GDP, recorded a deficit of 2.7 percent in FY08 compared to a deficit of 0.1 percent in FY07. Despite large amount of interest payments, the worsening of primary balance was mainly attributable to high current expenditures.

Also, primary and revenue balances, measured as percentage of GDP, moved solidly into deficit during FY08, after hovering around zero in the preceding years. The report said that a quarter-by-quarter accumulation of budget deficit showed a particularly large imbalance in Q4-FY08. However, a substantial part of this oversized addition to fiscal deficit in Q4-FY08 represented the recognition of the liability accrued during all three preceding quarters of FY08 on account of unpaid price differential claims.

Even though tax revenues increased by a respectable 18.1 percent during FY08, as compared to the growth recorded in FY07, the rise lagged behind 23.1 percent growth budgeted for the year, it said.

This was mainly caused by a substantial shortfall in collection under direct taxes. Also, collection of surcharges on oil and gas witnessed considerable declines, (due to non-adjustment of domestic energy prices with rises in international oil prices) leading to significant deceleration in non-tax receipts.

Consequently, total revenues rose to Rs 1,499.4 billion during FY08, up by 15.5 percent compared to 20.6 percent growth realised in FY07, the report said.

The deceleration in total revenues, combined with a rise of 35.9 percent in total expenditures dictated a large jump in fiscal deficit during FY08. The increase in total expenditure during FY08 was fuelled by excessive current spending owing to interest payments, subsidies and defence expenditures.
 
.

LAHORE (December 09 2008): A high level private sector trade delegation from Afghanistan will visit Lahore after Eid-ul-Azha to import Pakistan made diesel engines for agricultural purpose.

Chief executive officer KAM Engineering, Khalid Saeed Khan told APP here on Monday that the Pakistan made KAM diesel engines have become very popular in Afghanistan, compared to all brands of those made in India, and are being successfully used for agricultural purposes.

He further said the Afghan team will visit the state of the art plant and see the engine assembly process, using indigenous technical know-how and expertise, which has helped to control the price of the product with minimum overhead expenses.

In their war torn country, the Afghanis are now inclined to bring maximum area under cultivation to meet the ever increasing need of foodgrains. For this purpose, they need quality agri inputs and implements, and Pakistan made products offer the guarantee to compete in terms of quality and price, said the firm's Director Marketing, Sh Muhammad Amin.
 
.

FAISALABAD (December 09 2008): Pakistan's economy is showing trends of declining importance of the agriculture sector and the increasing importance of the services, industry and manufacturing sectors. However, the pace of structural change has been extremely slow (more than half a century) and growth rates showed a boom-bust cycle.

Though only recently the growth rates of the economy had been on a modest upward trend, the next few years may again show a downtrend. Inequality is still highly skewed and poverty has not decreased significantly.

A Report on 'National Agriculture Sector Strategy' (NASS) revealed this. The report is prepared by Lourdes Adriano, assisted by Ma Adora Deguito and Ma Roanna Santos of the Asian Development Bank (ADB) based on a consultant report for the NASS formulation unit of the Ministry of Food, Agriculture and Livestock in collaboration with the ADB through a Technical Assistance grant.

The ADB report suggested that the strategy and the five-year action plan for laying the groundwork to invigorating the rural economy so that it can contribute to a sustained and inclusive industrial growth road for Pakistan.

It said that like all developing countries, Pakistan is striving to become an industrialised economy. The road to industrialisation is indicated by decreasing share of agriculture to gross domestic product (GDP), labour force, export revenues and correspondingly higher shares of manufacturing, industry and service sectors in GDP.

A geographic movement of human and capital resources will also accompany shifting of the focus of economic sector from rural to urban areas. While there is a tendency for income inequality to become more skewed as the economy shifts gear from agriculture-dependency to industrial and service sector focus, per capita incomes will eventually rise, poverty will decline and a more egalitarian society will evolve.

The ADB report contended that the turtle pace feature of the structural transformation of Pakistan 's economy has a lot to do with the nature and quality of growth in the rural economy. Rural economy pertains to the economy of the rural area, which would include population concentrations in farms, villages and towns below a threshold of 40,000 people. Essentially the rural economy consists of farm and non-farm activities.

Farm or agriculture sector consists of crops, livestock, agro-forestry and fishery and aquaculture. Non-farm activities include all rural economic activities outside farm agriculture. It includes self-employment, wage employment and non-farm production.

Although non-farm activities are increasing in relative size and significance as employer of labour force in the rural economy, agriculture remains the major source of income in rural areas and is the driver of rural economic growth. However, the agriculture sub-sector's performance in the past half century has been mediocre, averaging at 2.8percent annual growth rate and dependent on a few commodities like wheat, cotton, rice, and sugarcane.

Further, diversification to other commodities has been slow and integration to value-adding supply chains and the global markets, have been weak. Where supply chain networks exist, integration has not stimulated further growth and multiplier effects in the manufacturing and service sectors in the rural non-farm sub-sectors. The rural non-farm sub-sector is characterised by micro and small to medium economic activities involving a numerous number of geographically dispersed and low-capital using intermediaries.

However, the report presents a disappointing conclusion saying that the end-result is a virtuous circle of slow growth in the rural economy, lagging expansion of the service and industrial sectors, concentration of urban growth in a few large metropolis centres. Additionally, a slow rise of per capita incomes (mainly in urban areas), leaving the majority of the rural populace still impoverished.
 
.

LAHORE (December 09 2008): After having a self-funded airport and Dry Port projects, the exporters' community in Sialkot is now heading seriously towards setting up 200MW power plant on self support basis.

Sources in the Sialkot exporters community informed the Business Recorder that a meeting was held recently in this connection where representatives from Sialkot Chamber of Commerce and Industry and different trade bodies considered seriously of putting up a power plant in private sector with a generation capacity ranging between 150 MW to 200MW.

"Contacts are made with one leading electric company in Lahore to have back-up information on the project and a delegation of Sialkot exporters is due to visit it after Eid holidays," said sources.

The power consumption of Sialkot's export-led industry ranges between 250 - 300MW at present and the exporters are thinking seriously to install a power generation plant through self-funding like they did earlier in the case of Rs2.5 billion Sialkot International Airport project as well as the Sialkot Dry Port project.

Sources in the Sialkot exporters' community said concerns of this export-oriented city are mounting with everyday increase in power shortages. These circles further believe that the government would not be able to meet a power shortage of 5000MW by December 2009, as claimed by the PPP-led government. Therefore, they said, the Sialkot exporters have decided to build their own power generation resources instead of relying upon fragile government claims.

Important developments are expected to take place on the project after Eid when the Sialkot city exporters would be negotiating with a leading electric appliances company in Lahore. Sources have further pointed out that the concerned company may also be ready to have a joint venture with Sialkot exporters in the project. However, no estimates of setting up 200MW power generation plants were available with the exporters and they pointed out that a meeting with electrical company would be helpful in this regard.
 
.
Neo tu agaya mere dost:chilli::bunny::bunny:

Bro i have updated the thread yesterday,you are posting the old ones:undecided:
 
  • Like
Reactions: Neo
.

ISLAMABAD (December 07 2008): Pakistan will require one billion dollars to build underground storage to store gas to be imported from Iran and Turkmenistan. Sources in Petroleum Ministry revealed to Business Recorder on Saturday that Asian Development Bank (ADB), in a joint study with Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), had disclosed that the proposed underground storage would cost one billion dollars to store gas imported from Iran and Turkmenistan.

The ADB has also noted that Sindh is the most suitable province as far as geographic, political and law and order situation is concerned. However, the work on the underground gas storages, sources added, would be initiated after gas import deals with Iran and Turkmenistan matured.

According to the sources, the government has already reconstituted a sub-committee of the Economic Co-ordination Committee (ECC) of the Cabinet that has a mandate to oversee Iran-Pakistan-India (IPI) gas pipeline and Turkmenistan-Afghanistan-Pakistan-India (TAPI).The committee will also monitor the underground gas storages project.

Sources said that SNGPL, SSGCL and ISGCL would be involved in building three to four underground gas storages to store imported gas from Iran and Turkmenistan. Pakistan will import 2.2 billion cubic feet gas from Iran, out of which Pakistani share stands at 1.05 billion cubic feet. If India does not join the project, Pakistan would consume the entire amount, i.e. 2.2 billion cubic feet.

Pakistan will import 3.2 billion cubic feet gas from Turkmenistan and this gas would be shared equally by Pakistan and India. Sources said that Pakistan would also need underground storages for gas reserves and the gas would be supplied to different areas of the country from these underground gas storages.

Pakistan and Iran have currently entered a dispute over the gas price that is the big hurdle to make further progress on the IPI gas pipeline project. The sources further said that Pakistani and Iranian officials were expected to meet soon in Tehran to resume dialogue on the gas price issue.

Iran has demanded an increase in price according to a new pricing formula; the earlier gas sales purchase agreement (GSPA) had been agreed between Pakistan and Iran.

Sources said that the steering committee on TAPI gas pipeline project was scheduled to meet in New Delhi during the current month, but the Mumbai carnage had caused a delay. Turkmenistan, during the meeting, was expected to present certification on its gas reserves, a demand made by Pakistan and India several times. Turkmenistan has failed so far to provide the gas reserves certification.
 
.
Status
Not open for further replies.

Pakistan Defence Latest Posts

Back
Top Bottom