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  • Suitable increase in salaries to be proposed in upcoming budget: finance ministry

    Suitable increase in salaries to be proposed in upcoming budget: finance ministry

    ISLAMABAD: The government to propose suitable increase in salaries of government employees in the upcoming budget 2020/2021, said a statement issued by the Finance Division on Thursday.

    In response to the strike call by the Secretariat employees for raising their salaries the ministry of finance has held meetings with the federal government employees to assure them that their proposals will be duly considered and proposed to the government in the next budget.

    In a statement issued here Thursday, the Finance Division has said that on the instructions of Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh, separate meetings of Secretary Finance as well as Special Secretary Finance had been held with the protesting employees to get a full understanding and awareness of the financial constraints and problems of the government employees due to the inflation.

    The statement said that the government understood and acknowledged the difficulties and economic constraints faced by the federal government employees and in view of their inputs obtained in the meetings held, proposal for a suitable raise in their salaries would be prepared by factoring in the overall economic situation, and available fiscal space and incorporated in the upcoming Federal Budget 2020-21.

    In another statement, the ministry of finance denied a news report published in a section of the press suggesting and insinuating a Rs 100 billion cut in the Public Sector Development Programme (PSDP) for the current fiscal year as per briefing by the Finance Secretary to the National Assembly’s Standing Committee on Finance and Revenue the other day.

    The Finance Division strongly denies and rebuts this news report as the Secretary Finance never stated at any point during his presentation to the National Assembly’s Standing Committee on Finance and Revenue that there could be cut in the federal development programme this year, said an official statement issued by the Finance Division today.

    The statement asserted that the Finance Division has actually facilitated maximum and speedy disbursements for the year and there is no cut planned or suggested in the development spending for the current fiscal year. The Finance Division has always provided full support to Planning Division to ensure timely expenditure, said the statement.

  • Foreign exchange reserves increase to $18.906 billion

    Foreign exchange reserves increase to $18.906 billion

    KARACHI: The foreign exchange reserves of the country increased by $37 million to $18.906 billion by week ended March 06, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves were at $18.869 billion a week ago.

    The official reserves of the central bank increased to $12.789 billion by week ended March 06 from previous week‘s level of $12.757 billion.

    The reserves held by commercial banks was at $6.115 billion as against $6.111 billion by week ended February 28, 2020.

  • ECC approves electricity subsidy package for export sector

    ECC approves electricity subsidy package for export sector

    ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet has approved a special relief package for export sector in shape of subsidized electricity.

    Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet on Wednesday at the Cabinet Division.

    The ECC approved a proposal by Power Division for a special relief package to further continue provision of subsidized electricity until June 2020 to five export oriented sectors.

    ECC has discussed proposal to increase wheat support price to Rs 1400 per 40 kg and will convene a special session tomorrow afternoon to discuss a detailed plan to keep the flour prices at the lowest possible level throughout the year in view of any increase in support price and incidental charges for supply of PASSCO procured wheat to provinces and allied issues related to procurement of wheat by provinces and the private sector.

    ECC also approved a proposal by Ministry of Energy (Power Division) for two amendments aimed at providing ease of doing business to upstream Petroleum sector.

    The amendments are related to extension of exploration licences beyond two years by ECC rather than the Minister in Charge of Petroleum Division and creation of a new Zone-1 (F) for onshore licensing regime and consequent revision in the Zonal Map.

    The ECC also approved National Telecommunication Corporation’s revised budget estimates for 2018-19 and 2019-2020.

    The ECC also gave an in principal approval for a proposal for SAR 22.5 million equity investment abroad by Eastern Products Pvt (Ltd) Pakistan.

  • Remittances grow by 5.4% in July-February

    Remittances grow by 5.4% in July-February

    KARACHI: The workers’ remittances received during July – February 2019/2020 amounted to $15.126 billion recording an increase $770.7 million or 5.4 percent over remittances received during July – February FY19 ($ 14,355.8 million), State Bank of Pakistan (SBP) said on Tuesday.

    Workers’ remittances during February 2020 amounted to $ 1,824.3 million recording a decrease of $ 83 million or 4.4 percent over remittance received during previous month (January 2020 $ 1,907.32 million).

    The remittances during February 2020 ($ 1,824.3 million) increased by $ 242.6 million or 15.3 percent over remittance received during corresponding month of FY 19 ($ 1,581.8 million).

    During February 2020, larger amounts of Workers’ Remittances are received from Saudi Arabia ($ 421.96 million), UAE ($ 387.1 million), USA ($ 333.5 million) and UK ($ 253.5 million) recording a decrease of 2.6 percent, 2.1 percent, 0.5 percent and 15.2 percent respectively as compared to January 2020.

  • Massive fall in global oil prices blessing for Pakistan economy: analysts

    Massive fall in global oil prices blessing for Pakistan economy: analysts

    KARACHI: The massive fall in international oil prices are blessing for Pakistan economy, analysts said on Monday.

    At the opening of international markets on Monday, oil prices declined significantly with WTI down by 26.5 percent to USD 30/bbl, Brent Oil down by 25 percent to USD 34/bbl and Arab Light Oil down by 34 percent to USD 34/bbl.

    This resulted as a direct consequence of disintegration of OPEC-Plus alliance while major countries could not agree to cut the oil output to reduce its supply to the global markets.

    “Pakistan is a net importer of oil with petroleum group imports contributing 25 percent to imports. WTI Oil prices averaged USD 57/bbl during past 12 months and have currently nosedived to USD 30/bbl. Pakistan would be able to save USD 5bn per annum on its imports,” analysts said at Arif Habib Limited.

    A decline in oil prices reduces Pakistan’s import bill hence resulting to lower trade and current account deficits and saves foreign currency.

    Consequently, lower oil prices translate to lower inflation demanding monetary easing leading to better consumer purchasing power benefitting other sectors with higher demand.

    Major benefitting sectors include cyclical sectors like cement, steel and automobiles. Major sectors which will bear the brunt of lower oil prices would include E&P, Refineries and OMCs.

    Lower oil prices improve government’s budget balance as it enhances government’s ability to collect taxes and reduces the amount of subsidy the government provides on sale of energy.

    In addition, the government would be able to spend the additional taxation on PSDP, improving growth prospects of the economy.

    The objective of the government should be, in addition to lower inflation, cover tax collection shortfall and implement long-awaited energy sector reforms including gas and electricity.

  • Foreign exchange reserves increase by $126 million

    Foreign exchange reserves increase by $126 million

    KARACHI: February 28, 2020 – Pakistan’s total liquid foreign exchange reserves posted a notable increase of $126 million during the week ended February 28, 2020, according to data released by the State Bank of Pakistan (SBP) on Thursday.

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  • Trade deficit narrows by 26.52% in July – February

    Trade deficit narrows by 26.52% in July – February

    ISLAMABAD: The trade deficit has narrowed by 26.52 percent in first eight months (July – February) 2019/2020 owing to fall in import bill.

    The trade deficit reduced to $15.773 billion during first eight months of current fiscal year as compared with the deficit of $21.467 billion in the corresponding months of the last fiscal year, according to data released by Pakistan Bureau of Statistics (PBS) on Wednesday.

    The import bill significantly reduced by 14.06 percent during the period. The import bill of the country was at $31.42 billion during July – February 2019/2020 as compared with $36.563 billion in the corresponding period of the last fiscal year.

    The exports of the country also increased by 3.65 percent during the period under review. The exports grew to $15.648 billion during first eight months of current fiscal year as compared with $15.097 billion in the same period of the last fiscal year.

    The exports however increased by 13.82 percent to $2.14 billion in February 2020 as compared with $1.88 billion in the same month of the last year.

    The imports in February 2020 fell by 1.71 percent to $4.073 billion as compared with $4.144 billion in the same month of the last year.

    The trade deficit for the month of February 2020 was at reduced by 14.61 percent to $1.93 billion as compared with the deficit of $2.263 billion in the same month of the last year.

  • ECC approves withholding tax exemption on remittances transfer to bank accounts

    ECC approves withholding tax exemption on remittances transfer to bank accounts

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved exemption from withholding tax on transfer of remittances into bank accounts.

    The ECC approved at the meeting on Wednesday chaired by Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh.

    The ECC approved that the amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.

    The ECC approved a host of measures to encourage and facilitate the overseas Pakistanis to send their remittances through official banking channels.

    Under the decision, following measures for the enhancement of home remittances through banking channels were approved:

    i. The rebate of reimbursement of T.T. Charges transactions between USD 100 and USD 200 will be increased from SAR- 10/- to SAR-20/-.

    ii. Continuation of the New Scheme of incentives launched in 2018-19 for banks and exchange companies during the current calendar year from January 2020. As per Scheme financial institutions would be incentivized Rs. 0.50 per 1 USD on 5 percent growth, Rs. 0.75 per 1USD on 10 percent growth and Rs. 1/- per 1USD on 15 percent growth.

    iii. The amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.

    iv. A “National Remittance Loyalty Program” will be launched from September 1, 2020 with collaboration of major commercial banks and government agencies through which various incentives will be given to remitters through mobile apps and cards.

    ECC approved a technical supplementary grant of Rs.9.6 billion during the current financial year to finance the above mentioned initiatives.

    Taking up other agenda items, the ECC approved a proposal by the Ministry of Federal Education & Professional Training for a technical supplementary grant of Rs 5 billion in favour of the Higher Education Commission (HEC) for the current Financial Year 2019-20 with instruction for a judicious and need-based distribution of funds among the universities.

    The ECC also approved a proposal by the National Security Division for a technical supplementary grant amounting to Rs 15 million for the Strategic Policy Planning Cell (SPPC) created in the National Security Division with the approval of the Prime Minister to act as an intellectual hub for evidence-based policy input on key national security issues.

    On a proposal by the Ministry of Defence, the ECC okayed a proposal for a technical supplementary grant amounting to Rs 34.528 million for Internal Security Duty Allowance to the Pakistan Air Force.

    On a proposal by the Petroleum Division, the ECC approved allocation of gas to SSGC and Provisional Tight Gas Incentive for Rehman-4 Well in Kirthar Block subject to the finalization and approval of requisite third-party certifications for Tight Gas for the same well.

    The ECC also discussed a proposal regarding quarterly adjustments of the K-Eectric Limited for the period from July 2016 to March 2019 and in the light of input and discussion by the members, set up a committee including Minister for Power Omar Ayub Khan, Minister for Economic Affairs Muhammad Hammad Azhar, Deputy Chairman Planning Commission, Secretary Finance and a representative from the K-Electric to examine the issue in detail and recommend to ECC within a week a solution and roadmap for resolving the issue.

    The ECC also deliberated upon a proposal by the Ministry of Energy to further extend till June 2020 the grant of subsidy to agricultural tubewell consumers in Balochistan.

    Earlier, the ECC was briefed that nearly 30,000 agri consumers in Balochistan had been given subsidy since 01.01.2015 with 40 percent of the burden of subsidy born by the Government of Pakistan and the remaining 60% picked up the Balochistan government.

    However, the recovery of dues from the farmers for the electricity consumed over and above the limit of subsidy had been negligible and attempts to recover these dues from defaulters in the past had not been successful.

    The ECC discussed the issue in detail and set up a Committee, including the Minister for Power, to discuss the issue with the Government of Balochistan to ensure a credible solution to the problems impeding a judicious execution of the scheme for which the federal government alone was contributing Rs 9 billion annually, and also allowed the extension of subsidy until a solution to the issue was found by the Committee and put in place.

    On a proposal by the Ministry of Industries and Production for revival of M/s Tuwairqi Steel Mills Limited (TSML) – A Direct Reduced Iron (DRI) Unit, the ECC discussed the issue and asked the Ministry of Industries and Production to resubmit the proposal in the light of recent and ongoing development on different issues among stakeholders on the proposal.

  • World Bank approves $300 million to support Pakistan human capital, livelihoods

    World Bank approves $300 million to support Pakistan human capital, livelihoods

    WASHINGTON: The World Bank has approved $300 million to support human capital and livelihoods in Pakistan, said a statement on Wednesday.

    Pakistan is accelerating investments in health care and education to prepare children to reach their productive potential and generate wealth. Today the World Bank committed $200 million for the Punjab Human Capital Investment Project that will strengthen health services and social protection for poor and vulnerable households in select districts in Punjab.

    “Pakistan’s strongest asset is its people. Investing at the start of life, especially for girls and women, is essential to empower citizens to thrive,” said Illango Patchamuthu, World Bank Country Director for Pakistan. “This project will help the Punjab province to invest in early years now to create a productive workforce for the future.”

    The project will increase the quality and uptake of health services, including maternal care, immunizations, and childbirths attended by qualified professionals, reaching up to 18 million people. It will provide early childhood education and skills training for young parents and will improve systems to more efficiently manage economic and social inclusion programs.

    “There are substantial financial and non-financial barriers to access quality health services, such as expenses to visit health facilities and the burden of household chores and childcare, especially among women in poor households,” said Yoonyoung Cho, Task Team Leader for the project.

    “The first 1,000 days are the most critical time in a child’s development, thus prioritizing maternal and natal care is integral to their productive capacity and strengthening human capital accumulation in Pakistan.”

    The World Bank also approved $85 million in grants and credits from IDA18 Regional Sub-Window for Refugees and Host Communities and $15 million from the Multi-Donor Trust Fund to the Federal Government and the Government of Balochistan to support the strengthening of institutions, delivery of services, and support for livelihoods and enterprise development.

  • Prime Minister welcomes banks’ proposals for revival of sick industrial units

    Prime Minister welcomes banks’ proposals for revival of sick industrial units

    ISLAMABAD: Prime Minister Imran Khan on Tuesday welcomed proposals of banks for revival of sick industrial units.

    A delegation of prominent bankers of the country called on Prime Minister Imran Khan in Islamabad.

    Prime Minister Imran Khan welcomed the proposals of the banking community particularly those related to the revival of the sick industrial units.

    Adviser to PM on Finance Dr. Abdul Hafeez Shaikh, Adviser to PM on Institutional Reforms Dr. Ishrat Hussain, Governor State Bank of Pakistan Syed Reza Baqir and senior officials of the Government were present during the meeting.

    The bankers apprised the Prime Minister about the issues concerning banking sector in terms of financing for accelerating the economic activities aimed at wealth creation and presented various suggestions to overcome issues being encountered.

    The Prime Minister stated that the Government is working relentlessly for economic growth and sustained positive sentiments, domestically as well as externally.

    The Prime Minister highlighted human resource potential of the country with enterprising youth in majority; we need to channelize their energies through skill development thereby enabling them to contribute towards economic development.

    The Prime Minister said that the present Government is focused on reviving sick industrial units and promoting the SMEs, as they are essential for wealth creation and generation of employment opportunities.

    The Prime Minister appreciated the proposals of the delegation and assured maximum facilitation.

    The meeting was informed that Corporate Restructuring Company has been established to take over sick industrial units for the purpose of reviving the commercially or financially distressed companies thereby making them profitable with consultation of all the stakeholders.