ALL SET TO DECLARE ZERO-RATED COS AS EXPORT-ORIENTED SECTORS
Mushtaq Ghumman Updated 29 Jun 2020
ISLAMABAD: The federal government is to declare existing zero rated companies as export oriented sectors with same products included in the SRO-1125, well informed sources in Commerce Ministry told Business Recorder.
Sharing details, sources said, FBR declared five sectors namely textile including jute, leather, carpet, surgical and sports goods as zero rated sectors under SRO 1125, on which the sales tax was charged at zero-rate. Further supply of electricity and gas to registered manufactures or exporters of five zero rated sectors were charged sales tax at the rate of zero percentage in the manner specified by the FBR.
The sources said that FBR for the purpose of registering to provide zero rating on supply of electricity and gas to manufacturers and exporters of five sectors, issued Sales Tax General Order 117 of 2015.
The government has provided concessionary rate of Cents 7.5/ kWh, RLNG at $ 6.5/ MMBTU and gas at Rs 786/ MMBTU. The facility was provided to registered manufacturers and exporters of the five zero rated sectors with the FBR.
The government in federal budget 2019-20 rescinded SRO-1125 under which the zero rating has been withdrawn for five sectors namely textiles, leather, carpet, surgical and sports goods.
The erstwhile five zero rated sectors i.e. textile including jute, leather, carpet, surgical and sports goods were given the nomenclature of export oriented sectors by Ministry of Commerce after approval of ECC of the Cabinet on December 13, 2019.
The concessionary regime of electricity and gas continued to erstwhile five zero rated sectors, now called export oriented sectors, however, the issue of registering new units under the export oriented sectors was raised i.e. erstwhile zero rated sectors so that they can also avail the benefit of the concessionary regime. Further, the FBR extended the zero rating certificate of existing consumers initially till March 31, 2020 and then to June 30, 2020. Therefore, the companies registering under zero rated by FBR are being provided concessionary electricity, gas and RLNG by the Power and Petroleum Division till June 30, 2020.
A meeting on this issue was held on May 13, 2020 under the chairmanship of Advisor to the Prime Minister on Commerce and Investment, and was attended by representatives of Petroleum Division, Federal Board of Revenue, Energy Ministry and Commerce Ministry. It was agreed that a summary may be moved for approval of ECC of the Cabinet.
Previously, the FBR was issuing the General Order for grant of zero rating to erstwhile five zero rated sectors. The best option is to direct the FBR to continue registering, the new manufacturers and exporters, however, instead of registering under SRO 125, FBR may register under export oriented industrial sectors vide OM F. No.1(18)/2019-SO(M&I) of December 13, 2019, issued by the Ministry of Commerce.
The sources maintained that Ministry of Commerce by issuing the O.M, has only provided a new nomenclature to erstwhile zero rated sectors as export industrial sectors.
The Commerce Ministry, in its summary, has requested the ECC to approve the following ;(i) previous list of companies declared zero rated by FBR may be adopted in export oriented sectors;(ii) same products which have been in SRO -1125 would continue for export oriented sectors ;(iii) FBR may register new applicant units, in accordance with past precedents of STGO-117, under Commerce Division’s O.M. No. 1(18)/2019 of December 13, 2019 in manner specified by the FBR and ;(iv) FBR, Petroleum Division and Power Division to formulate regular/ routine/ random rechecking / monitoring/ withdrawal strategy for the previous and newly registered companies along-with procedure to penalize in case of misrepresentation and misuse.
Copyright Business Recorder, 2020
PAKISTAN DISAPPOINTED WITH STATE DEPARTMENT REPORT: FO
Ali Hussain 26 Jun 2020
ISLAMABAD: Pakistan on Thursday expressed “disappointment” at the “self-contradictory and selective” characterization of the country’s efforts for countering terrorism and terror financing in the United States’ annual report.
“We are disappointed with the US State Department’s Annual Country Report on Terrorism for 2019, which is self-contradictory and selective in its characterization of Pakistan’s efforts for countering terrorism and terrorist financing,” said Foreign Office spokesperson Aisha Farooqui, while reacting to the US State Department’s 2019 Country Report on Terrorism, which was released on Wednesday.
In its report, the State Department, once again accused Pakistan of offering terrorists “safe haven” for certain regionally-focused terrorist groups, including the Afghan Taliban, and affiliated Haqqani Network, as well as groups targeting India such as Lashkar-e-Taiba (LeT), and its affiliated organization Jaish-e-Muhammad (JeM), to operate from its territory,” the report maintained.
“Pakistan is fully aware of its responsibilities as a sovereign state. We reject any insinuation about any ‘safe haven’. Pakistan will not allow any group or entity to use its territory against any country,” Farooqui said.
On the contrary, it is Pakistan that faces the threat of terrorism from externally-based and foreign-sponsored groups, such as the Tehreeke-e-Taliban Pakistan (TTP), Islamic State of Iraq and the Levant-Khorasan (ISIS-K), and others. “The report is again either silent or vague on the origins and locations of these terrorist groups,” she added.
While the report recognizes that Al-Qaeda has been seriously degraded in the region, Farooqui added that it neglects to mention Pakistan’s crucial role in decimating Al-Qaeda, thereby diminishing the threat that the terrorist group once posed to the world.
Similarly, she added that the report acknowledged the sharp decrease in the incidence of terrorist attacks in Pakistan. However, it neglects to explain that this was only possible because Pakistan’s resolute counter-terrorism operations have targeted proscribed groups, and outfits without discrimination, she added.
“Pakistan remains committed to fulfilling its obligations under the UNSC 1267 sanctions regime for the freezing of assets and denial of funds and economic resources to all designated entities and individuals,” the Foreign Office spokesperson asserted.
In recent months, she pointed out that Pakistan had prosecuted and convicted the leadership of several proscribed groups, which had been acknowledged by the United States elsewhere but only merited a passing mention in the report.
Pakistan also continues to implement the Financial Action Task Force (FATF) action plan, and has undertaken wide-ranging and systemic reforms to that end, she said, adding that while it notes the progress made by Pakistan under the action plan, the report did not capture the political commitment, revamping of Pakistan’s AML/CFT regime, and our consistent and sustainable actions, which have also been recognised by the FATF.
“The report fails to acknowledge the full extent of Pakistan’s support for the Afghan peace process, which has created a historic opportunity for lasting peace in the region,” she said, adding that Pakistan’s positive contribution and facilitation of US-Taliban direct talks culminating in the peace agreement of 29 February 2020 were widely acknowledged, including by the US, and its leadership.
“Pakistan hopes that future US reports will fully acknowledge the entire spectrum of Pakistan’s counter-terrorism efforts and present a fair and correct perspective of this global threat,” she expressed the hope.
Copyright Business Recorder, 2020
OIL TANKERS CARRYING TWO MONTHS OF VENEZUELAN OUTPUT STUCK AT SEA
Marianna Parraga | Roslan Khasawnch 25 Jun 2020
ARTICLE: Tankers carrying nearly two months worth of Venezuelan oil output are stuck at sea as global refiners shun the nation’s crude to avoid falling foul of U.S. sanctions, according to industry sources, PDVSA documents and shipping data.
Washington is tightening sanctions to cut Venezuela’s oil exports and deprive the government of socialist President Nicolas Maduro of its main source of revenue.
The OPEC member’s exports are hovering near their lowest levels in more than 70 years and the economy has collapsed, but Maduro has held on – to the frustration of the administration of U.S. President Donald Trump.
Washington has blacklisted ships and merchants this month for their role in trading and transporting state-run PDVSA’s oil and threatened to add more to its list of sanctioned entities.
At least 16 tankers carrying 18.1 million barrels of Venezuelan oil are stuck at sea around the globe as buyers shun them to avoid falling foul of sanctions, according to Refinitiv Eikon data. That is the equivalent of almost two months of output at Venezuela’s current production rate.
Some of the vessels have been at sea for more than six months, and have sailed to several ports but failed to unload.
Oil cargoes are rarely loaded onto a tanker without a buyer. Those that are on the water with no buyers are generally seen as distressed in the industry, and typically sold at a discount.
Each tanker is incurring hefty demurrage charges for every day’s delay in unloading. The cost for a vessel transporting Venezuelan oil is at least $30,000 per day, according to a shipping source.
“This is our third attempt to find a buyer,” said an executive from an oil company registered as PDVSA customer, which took a cargo of Venezuelan heavy crude in January and has been unable to sell it due to the possibility of sanctions.
The cargo has accumulated demurrage fees in Africa for over 120 days, the executive said, speaking on condition of anonymity.
Even PDVSA’s long-standing customers are struggling to complete transactions that are permitted under sanctions- for debt payment or food swaps, the executive added. Buyers are concerned about sanctions even for those cargoes.
The Panama-flagged MT Kelly is one of the vessels stuck at sea. It sailed for Turkey in April with no charterer disclosed by PDVSA at its monthly loading schedule. The vessel entered the Mediterranean only to turn around, sail back through the Strait of Gibraltar and steam around the coast of Africa, according to the data.
PDVSA, Venezuela’s oil ministry and Greece-based Altomare SA, commercial manager of the MT Kelly, did not reply to requests for comment.
Most of the other tankers set sail for Malaysia, Singapore, Indonesia or Togo, where they typically transfer their oil to other vessels at sea, sometimes disguising their origin before they are shipped to a refiner. The vessels have not discharged, but some have switched off the transponders that broadcast their position, according to the Eikon data.
Six of the vessels anchored off Malaysia are managed by Greece-based Eurotankers Inc and have been waiting for up to four months to discharge, according to the Eikon data. Eurotankers did not reply to a request for comment.
Mexico’s Libre Abordo, which along with related firm Schlager Business Group chartered three of the stranded cargoes according to the PDVSA documents, declined to comment. The companies were blacklisted by the U.S. Treasury Department last week along with their owners for trading Venezuelan oil through a pact described by the firms as an oil-for-food agreement.
Amsterdam-based GPB Global Resources, which chartered two other cargoes, declined to comment on the vessels, but said the company and its subsidiaries “are conducting business in compliance with all applicable rules and regulations, including US sanctions.”
Hong-Kong based Richeart International, in charge of another four shipments, could not be reached for comment.
The plight of Venezuela’s exports comes as most oil producing nations continue struggling to allocate high inventories in an over-supplied market, which has diminished many buyers’ appetite for risky oil such as Iranian and Venezuelan crude.
The threat of tighter U.S. sanctions is also disrupting the global shipping market. Since late May, at least six tankers that were sailing toward Venezuela or waiting to load for exports have been diverted as the United States considers blacklisting more vessels and shipping firms over alleged sanction violations.-Reuters
AIIB APPROVES $500M LOAN FOR PAKISTAN’S COVID-19 RESPONSE
Khaleeq KianiUpdated 19 Jun 2020
ISLAMABAD: The Asian Infrastructure Investment Bank (AIIB) has approved a $500 million loan to help Pakistan effectively manage the Covid-19 outbreak and reduce its immediate social and economic impacts.
In statement, the board of directors of the Beijing-based lending agency said the loan under Covid-10 Active Response and Expenditure Support (CARES) programme was a quick disbursing window with a total allocation of $5-10 billion created by the AIIB to co-fianance immediate needs of the member countries with the support of multilateral lending agencies like the World Bank and the Asian Development Bank.
The loan is “to support the Government of Pakistan’s efforts to effectively manage the Covid-19 outbreak and reduce its immediate social and economic impacts”, the AIIB said. It noted that Pakistan’s ongoing economic recovery and ability to sustain high and inclusive growth have been significantly impacted by the Covid-19 pandemic.
According to estimates by the International Monetary Fund (IMF), the country’s remittances will decline by around $5bn for FY2020 and FY2021 and export growth is likely to come to a halt due to a fall in external demand. Total revenue is expected to decline by more than $6 billion in FY2020, which will contribute to increasing Pakistan’s primary fiscal deficit by about two percentage points. These impacts have already led to significant job losses, both in formal and informal sectors, the AIIB said.
Will help fill government’s financing gaps in implementing health and social safety net
The AIIB’s financing for CARES, funded under its Covid-19 Crisis Recovery Facility (CRF) and co-financed with the Asian Development Bank, is designed to promote social protection and economic resilience to prevent long-term damage to the productive capacity, including human capital, of Pakistan’s economy.
This policy-based loan is provided through general budgetary support to fill the government’s financing gaps in implementing health, social safety net and economic stimulus measures. The funds will support expenditures allocated by the government for protecting the poor and vulnerable, including women, augmenting the health sector capacity and supplies, and protecting productive sectors and small businesses from economic downturn.
“By supporting industries and vulnerable groups that have been hard hit by Covid-19, this financing will help mitigate the economic shock and social impacts the country is currently facing,” said AIIB vice president, investment operations, Konstantin Limitovskiy. “Preventing long-term damage to the productive capacity of the economy is essential. AIIB’s joint efforts with the international community are targeting this need,” he said.
Published in Dawn, June 19th, 2020
TEXTILE, AUTO SECTORS DISAPPOINTED WITH LACK OF INCENTIVES IN BUDGET
Aamir Shafaat KhanUpdated 14 Jun 2020
KARACHI: Automobile, textile and employee federation representatives have shown their disappointment over the absence of measures to cut the cost of production or create jobs in the Budget 2020-21.
Pakistan Automotive Manufacturers Association (PAMA) Director General Abdul Waheed Khan told Dawn that in the light of massive downturn, the auto industry was expecting a stimulus package at least in the shape of withdrawal of unnecessary and avoidable taxes such as additional customs duty (ACD), additional sales tax (AST), federal excise duty (FED) of 2.5-7.5 per cent depending on engine power and turnover tax.
While the budget had nothing in this regard, he said the government did not even consider the association’s proposals regarding the advance tax under Section 148 or corporate tax or other important measures.
He said the government’s intervention is inevitable to revive the auto industry at this critical juncture when sales have come down by over 50-80pc in various segments during the 11 months of the current fiscal year leading to low revenue collection.
He said the auto industry has suffered due to frequent policy changes and other factors like exchange rate parity, demand collapse and the recent lock down. “The government should have announced a stimulus package in Budget FY21 to revive the auto industry,” he added.
Pakistan Association of Automotive Parts and Accessories Manufacturers former chairman Mashood Ali Khan said the budget has nothing for auto manufacturers. The government should have abolished ACD, AST and FED to bring down vehicle prices besides cutting down turnover tax to 0.5pc from the existing 1.5pc.
However, the budget has not provided any relief to the ailing auto sector. He added that manufacturers would face hard times in coming months in absence of any relief from the government and sluggish demand.
“While existing assemblers and vendors will suffer badly due to falling sales and lack of support from the budgetary measures, Pakistan is unlikely to witness any fresh investment as the budget lacks any incentives,” Mashood said.
Association of Pakistan Motorcycle Assemblers Chairman Mohammad Sabir Sheikh said that “no measure has been taken in the budget to bring down the price of two wheelers which is a common man’s transport.”
He said this was a time for the government to announce a people-friendly budget under the current coronavirus crisis and lock down scenario which has wreaked havoc on the auto industry.
Employers Federation of Pakistan President Ismail Suttar said the budget lacks out-of-the-box solutions to jumpstart the economy, cut down manufacturing costs, create jobs or incentivise exporters amid reduction in business orders.
He said the broader policies and incentives such as reduction in utility costs were expected to induce growth in bread-winning industries.
Suttar said the budget should have been postponed this year due to the uncertain environment as the Constitution does not mandate a budget when it would cause wide-scale uproar from the business community. The GDP is revised down to negative 1.5pc and around 18.4 million people are expected to be unemployed. Hence, the highly ambitious target of Rs5 trillion in tax collection makes little sense, he added.
Pakistan Apparel Forum Chairman Muhammad Jawed Bilwani said the textile export industry was offered no remedy in the budget to combat against the 17pc sales tax. Exporters had demanded the government to restore zero rating or bring down 17pc general sales tax to 4pc.
He said the government’s financial managers have made this budget in a closed room, without holding any consultation or meeting with real stakeholders.
Published in Dawn, June 14th, 2020
HAFEEZ BLAMES COVID-19 FOR RS3 TRILLION GDP LOSS
Khaleeq Kiani Updated 12 Jun 2020
- Growth crashes into negative territory
- Public debt increases to 88pc of GDP
- FBR revenues to take Rs800bn hit
ISLAMABAD: The data released by the government presented a dismal economic performance as all indictors painted broad-based setbacks and Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh blamed Covid-19 for a loss of over Rs3 trillion to the national income.
Presenting the Economic Survey of Pakistan 2019-20 at a press conference on Thursday — a day before the announcement of the federal budget for financial year 2020-21 — the adviser spent a large part of his speech building narrative around inheriting a troubled economy and putting it on road to recovery before the Covid-19 pandemic hit economies of the world and Pakistan.
The data showed that not only most of the economic sectors actually went down but a few ones in the positive zone also missed targets. While Dr Shaikh put a brave face to fight back the economic contraction next year, he was equally uncertain about the recovery pattern or how long the downturn could go on to put numbers to economic loss, poverty rate or unemployment.
He, nevertheless, feared that exports and remittances could suffer and unemployment increase if the lockdowns and social distancing prolonged in the world and within the country. He said Pakistan’s gross domestic product (GDP) was estimated to have faced a Rs3tr loss. The GDP was expected to increase by three per cent with the support of economic policies, but it will now go down by -0.4pc. This means the national income would actually face 3pc to 3.5pc loss during this year.
On top of that, the adviser said the FBR revenues were projected to reach Rs4.7tr before the Covid-19 crisis, but they would now hardly be Rs3.9tr. About Rs800bn loss was simply on account of revenue, he said, adding that such a situation did not allow the government to further tighten the businesses and people in revenue pressure but warranted a helping hand to provide them with liquidity to better support the squeezing economy.
Dr Shaikh said the agriculture sector performed better with 2.67pc growth even though it missed the 3.5pc target. The industry went down by -2.64pc against a 2.3pc growth target, while the services sector dipped by -3.4pc against a 4.8pc growth target. He pointed out -7.1pc contract in transport and communication and -22.9pc fall in manufacturing, while fiscal deficit was estimated to touch 9.4pc against the 7.2pc target.
The Economic Survey launching ceremony was also attended by Minister for Economic Affairs Khusro Bukhtiar, Special Assistant to the Prime Minister (SAPM) on Commerce Abdul Razak Dawood and SAPM on Poverty Alleviation Dr Sania Nishtar. Other members of the PTI’s economic team Asad Umar, Omar Ayub Khan and Hammad Azhar were conspicuous by their absent.
Dr Shaikh said it was still very difficult to quantify the accurate impact of Covid-19 on the economy, but there was no doubt that it had been really hit hard and different institutions were making different projections based on quantum, severity and duration of the pandemic. “This is an unfolding event. The situation is evolving and no one could predict” how rapidly cases would increase and what would be the duration of the pandemic, besides what shape social distancing and lockdown would take in the coming days and weeks.
When the adviser was asked about the different projections — -1.5pc negative growth by the International Monetary Fund (IMF), -2.6pc by the World Bank and -0.4pc by Pakistani authorities — based on the same data and how many people could move into the poverty zone and how many to become jobless, he said it was not easy to make accurate projection because the situation was evolving on a daily basis and he was to be careful to rely on any number conclusively at this point in time or how many people would become unemployed or poor.
The adviser said the public debt had increased to 88pc of GDP and no government had been able to adhere to the legal requirement to keep the debt below 60pc of the GDP as stipulated in the fiscal responsibility and debt limitation law.
Khusro Bukhtiar said the external debt and liabilities stood at $76.5 billion and claimed that the previous government borrowed short-term commercial loans of $15bn.
Dr Shaikh said the present government also borrowed Rs7.6tr in the first year but only Rs1.5tr was on account of expenditure while all others were accrued on account of revaluation of old debt due to devaluation or over Rs1.2tr for cash buffer for strategic reason. During the current year, he said about Rs3.5tr borrowing took place, of which Rs2.7tr was on account of interest payments on the loans taken by the previous governments.
The adviser said the government had no intention to go for aggressive taxation but this did not mean that those who were rich would not be made to pay their due taxes. He said the IMF was a bank created by 200 countries to support members in distress by providing loans and policies. He said the IMF was the first to provide $1.4bn in emergency support and it also supported the government’s incentives package for small traders, the construction sector and industrial package along with social sector protection.
He said Pakistan wanted to give a message to the international community that it was a responsible country and had been treading the fiscal discipline in a professional and serious way. He said the economy was moving in the right direction before the Covid-19 crisis with considerable reduction in current account to $3.3bn and for the first time strict control in expenditure resulted in primary surplus.
Dr Shaikh gave credit to the prime minister and the army chief for putting a freeze on current expenditure and defence budget. He said no borrowing was made from the State Bank of Pakistan because it was not transparent attitude for one institution to borrow from another and charge its cost to the people through inflation. Also, not a single supplementary grant was issued to the ministries and divisions during the year, he added.
He said the government gave the Rs1.2tr economic stimulus package to provide relief to various sectors of the economy and people, and to manage the coronavirus damage in a better way, while the State Bank was provided subsidy for implementation of different programmes to provide support and relief to small and medium enterprises.
The adviser said non-tax revenue collection of Rs1.6tr against a target of Rs1.1tr was also the highest during the outgoing fiscal year and was a big step. The government had inherited an indebted economy and depleting foreign exchange reserves with threat of a potential default and was able to put together financial support from friendly countries and a big $6bn IMF programme that increased reserves from $9.7bn to $18.5bn by end of current year.
Published in Dawn, June 12th, 2020
RS1.32TR APPROVED FOR NATIONAL DEVELOPMENT PROGRAMME
Khaleeq KianiUpdated 11 Jun 2020
ISLAMABAD: As the provinces drastically cut their development plans, the National Economic Council (NEC) on Wednesday approved Rs1.32 trillion worth of consolidated development programme for next year — about 12pc lower than current year’s Rs1.5tr — to achieve an economic growth rate of 2.1 per cent.
The meeting of the NEC — the country’s highest constitutional forum on economy — was presided over by Prime Minister Imran Khan and attended by its federal members. All provincial chief ministers and other members participated via video-link.
The meeting approved Rs650 billion federal Public Sector Development Programme (PSDP) for next year, down about 7.3pc when compared to current year’s Rs701bn. This includes Rs70bn allocation for short-term Covid-19 response projects.
The Annual Development Programmes (ADPs) of the provinces were drastically slashed. As such, the cumulative ADPs of the four provinces would be around Rs674bn, down 16pc from current year’s Rs799bn allocation.
A Planning Commission official said the provinces had voluntarily slashed their development plans. He said they had earlier indicated Rs783bn worth of cumulative allocation but later conveyed their final allocation at Rs674bn.
While Punjab’s development budget mostly remained protected at Rs337bn for next year against Rs350bn for current year, Sindh and Khyber Pakhtunkhwa appeared to have massively cut their development allocations. This was evident from Rs165bn allocation by Sindh for development schemes next year compared to Rs279bn during current year, showing a reduction of almost 41pc.
KP’s development plan for next year was also restricted at Rs100bn compared to Rs236bn allocation for current year, down about 58pc. Balochistan’s development plan for next year is estimated at Rs75bn, down almost 31pc when compared to Rs109bn for current year.
The allocations for Azad Kashmir at Rs24.5bn and Gilgit-Baltistan at Rs15bn were kept unchanged. An official said Rs48bn have been set aside for the tribal region under the 10-year development plan for its mainstreaming and development schemes. For the first time, the PSDP does not include any unapproved project, he added.
The meeting reviewed the state of economy during current fiscal year and the outlook for FY 2020-21. It approved the GDP growth target of 2.1pc supported by sectoral growth rates of agriculture (2.8pc), industry (0.1pc) and services (2.6pc) for next year.
The NEC meeting was briefed that ‘even if the lockdown is completely lifted, the second-round impact of Covid-19 is expected to keep the growth performance of the country under check’.
The meeting was alerted that growth targets were “subject to favourable weather conditions, post Covid-19 economic recovery, managing current account deficit, consistent economic policies and aligned monetary and fiscal policies”.
It was reported that a quick recovery was expected while rehabilitation and recovery of industrial and services sectors would boost growth prospects. Monetary easing and debt relief will also improve fiscal position. Inflation is expected to remain in single digit at 6.5pc. External sector will also be improved due to resumption of remittances inflow and better export performance.
Industrial sector is targeted to grow by 0.1pc, with 0.7pc contraction in manufacturing sector based upon 2.5pc contraction in large scale manufacturing.
Published in Dawn, June 11th, 2020
90PC LOANS UNDER ROZGAR SCHEME DISBURSED IN TRIBAL DISTRICTS
Bureau Report Updated 10 Jun 2020
PESHAWAR: The Khyber Pakhtunkhwa government has disbursed 90 per cent loans in the tribal districts under Insaf Rozgar Scheme.
An official statement issued here on Tuesday said that the provincial government had allocated Rs1,100 million under the scheme to create maximum employment opportunities in the tribal districts. So far 90 per cent of the loans had been disbursed and 100 per cent disbursement would be ensured by the end of current financial year.
The statement said that Chief Minister Mahmood Khan chaired a meeting, which reviewed progress so far made on various projects of industries, commerce and technical education department launched in the merged areas under the Accelerated Implementation Programme (AIP).
The meeting was informed that so far 3,936 individuals had been provided loans under Insaf Rozgar Scheme. Similarly, another scheme worth Rs1,100 million had also been launched for provision of interest-free loans to people for development of entrepreneurship in the tribal districts.
The meeting was informed that progress on implementation of the scheme was as per the given timelines and it would be completed by the year 2022. The statement said that scheme for provision of scholarships to youth of tribal districts for skill development training had also been submitted to the competent forum for formal approval, under which more than 15,000 youth would be provided scholarships.
Regarding the proposed projects to be included in the multibillion rupees AIP of upcoming financial year, the meeting was told that eight schemes had been proposed under Khyber Pakhtunkhwa Technical Education and Vocational Training Authority that included establishment of polytechnic institutes in Mohmand and North Waziristan, provision of transport facility, clean drinking water, machinery and equipments to technical educational institutes, construction of buildings for 10 technical and vocational training centres.
Similarly, under the Small Industries Development Board (SIDB), projects for the establishment of small industrial estates at Dara Adamkhel and Bajaur had also been proposed. The forum was also told that schemes for the establishment of Mohmand marble city and special economic zone in Khyber had been proposed under Khyber Pakhtunkhwa Economic Zone Development and Management Company.
The chief minister directed the authorities concerned to take concrete steps for timely completion of the ongoing projects and fix realistic timelines to complete all the processes of the new developmental schemes of NMDs.
Published in Dawn, June 10th, 2020
CORONAVIRUS OUTBREAK: 3M JOBS COULD BE LOST IN ‘INITIAL ROUND’
Sardar Sikander Shaheen 06 Jun 2020
ISLAMABAD: Initially, some three million jobs are expected to be lost and Federal Board of Revenue’s (FBR’s) tax revenue may drop from Rs 4,800 billion to Rs 3,905 billion with a revenue loss of Rs 700 billion to Rs 900 billion expected from April to June 2020 as a result of the impact of coronavirus on Pakistan’s economy, Finance Ministry told the Senate on Friday.
With a shortfall in revenues and an increase in public spending due to fiscal stimulus package, fiscal deficit is expected to exceed the target of 7.5 per cent of GDP (Gross Domestic Product) and may go up to 9.4 per cent of GDP, reads the written reply of Finance Ministry to a question posed by Senator Mushtaq Ahmed from Jamaat-e-Islami (JI) regarding the estimated loss incurred by Pakistan’s economy due to pandemic of coronavirus.
Prior to coronavirus outbreak, GDP growth was projected at 3.24 per cent for fiscal year 2020 with Agriculture (2.85 per cent), Industry (1.95 per cent) and Services (4.04 per cent). The FY2020 posted a negative growth of 0.4 per cent (Provisional), of which Agriculture (2.67 per cent), Industry (-2.64 per cent) and Services (-0.59 per cent,” the Finance Ministry said.
Low economic activity in the European Union, the United States, the United Kingdom, Middle East and resultant fall in commodity prices, exports of Pakistan will remain around $ 21-22 billion (pre-Covid: $ 25.5 billion). Workers’ remittances are expected to remain around $ 20-21 billion (pre-Covid-19: $ 23 billion), the Ministry’s reply said.
Due to Covid-19, the Pakistani rupee depreciated by 7.5 percent on month-on-month basis in March over February FY2020, it added.
Later, speaking on the floor of the House during Senate session, Federal Minister for Industries and Production Hammad Azhar said that the number of tax filers has increased from 1.6 million to 2.6 million in a period of one year as a result of steps taken by the present government.
He said, Pakistan’s tax collection also witnessed a 27 per cent growth before the coronavirus outbreak. The post-pandemic has seen 30 per cent decline in tax collection but expressed the confidence that the situation will improve as the business activities are being resumed, he said.
On Pakistan Steel Mills (PSM), he said, the previous governments neither restored PSM nor privatized it, saying the present federal government is taking the ownership of PSM. He once again confirmed the retrenchment of over 9000 employees of PSM, saying each retrenched employee would be offered Rs 2.3 million on average.
“Today the debt of Pakistan Steel Mills stands at 230 billion rupees. He said the government has now decided to lease out the core steel mills operations to revive Pakistan Steel Mills,” he said.
The government gave a stimulus package of Rs 1200 billion to support different segments of society including the poor and the businesses during the Covid-19 pandemic, the minister said. “Our initiatives have helped reduce the inflation rate from twelve percent to eight percent. We have also reduced the petroleum prices which are currently the lowest in the South Asian region,” he said.
Adviser to Prime Minister on Commerce Abdul Razak Dawood said Pakistan has got orders for the export of personal protective equipment against Coronavirus. He said that surgical masks, N-95 and Tyvek gowns will not be exported.
The country’s fruits, vegetables, meat and poultry exports to the Middle Eastern countries witnessed a growth of 36 percent over the last 12 months, he said.
Pakistan enjoys close and cordial relations with Turkey and is negotiating a Free Trade Agreement with it to promote bilateral trade relations, Dawood said.
The Senate would meet again on Monday at 4 pm.
INP adds: Around three million jobs are expected to be lost in the “initial round” of the novel coronavirus outbreak, the finance ministry told the Senate in a written response submitted on Friday.
Out of the three million jobs, the industrial sector is likely to lose one million and the remaining two million will be lost in the services sector. The Pakistan Institute of Development Economics, the finance ministry said, estimated a loss of 18m jobs in agricultural, services and industrial sectors collectively.
The finance ministry also said the proportion of those living in poverty will increase from 24.3 per cent to 33.5pc.
The ministry also informed the Senate about the currency value, which depreciated by 7.5pc in March over February. The value of rupee against the dollar in February was Rs154.23 but in March, it decreased to Rs166.70. In April, the value of rupee had increased to Rs160.17 as the “volatility observed in domestic financial and foreign exchange markets […] somewhat subsided”, the finance ministry said.
Rupee value in May fell slightly to Rs163.10 in May, the report addded.
Before the pandemic, GDP growth for fiscal year 2020 was estimated as 3.24pc out of which:
agricultural sector was expected to record a 2.85pc growth
industrial sector was expected to record a 1.95pc growth
services sector was expected to record a 4.04pc growth
However, the year posted a negative growth of 0.4pc out of which industrial sector recorded -2.64pc, agricultural sector 2.67pc and services sector -0.59pc.
Copyright Business Recorder, 2020