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March 30, 2020 (PR No. 283)

Adviser to PM on Finance and Revenue chaired a special meeting ECC

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a special meeting of the Economic Coordination Committee (ECC) of the Cabinet today at the Cabinet Division. The purpose of the meeting was to fulfill the necessary requirements for different relief measures already announced by the Prime Minister for the public due to the ongoing Corona Virus Pandemic.

ECC approved the fiscal stimulus package of Rs. 1.2 trillion with main components as follows: -

ECC approved Supplementary Grant of Rs. 100 billion for the "Residual/Emergency Relief Fund" in terms of article 84(a) of the constitution of Islamic Republic of Pakistan for provision of funds for mitigating the affect of COVID-19.

The special Package for providing relief to the poor through cash assistance under the Ehsaas Program was also approved by the ECC. The package shall provide cash grants to 12 million families under the regular “kafalat program” and Emergency Cash Assistance on the recommendation of the district administration. The assistance will be provided for four months and besides the BISP beneficiaries it will be one time dispensation, the cash will be provided either in one installment of Rs 12000 through Kafalat partner banks i.e Bank Alfalah and Habib Bank Limited after biometric verification or it may be provided in two installments of Rs. 6000/- each. The Poverty Alleviation Division was asked to present both options with feasibilities. The partner banks may be asked to make arrangements through branchless banking networks to disburse cash. Rs 72.9 billion of additional funds through technical supplementary grant would be given to BISP under "Ehsaas Cash Assistance Package in Response to COVID-19" Pandemic.

After Ministry of Industries and Production presented a comprehensive proposals regarding the targeting parameters , implementation mechanism, cash assistance per family per month and financial phasing of the program, ECC approved Rs. 200 billion of cash assistance for the daily wagers working in the formal industrial sector and who had been laid off as a result of COVID-19 outbreak. It was estimated that around three million workers will fall in this category and they will have to be paid a minimum wage of Rs.17500 per month. The estimated cost of this provision for daily wagers comes around to Rs. 52.5 billion a month. The provincial labour departments shall ensure the delivery of assistance to the laborers while the provision of funds shall be the responsibility of the federal government. ECC directed that immediate consultation with the provincial labor departments( mentioned under the provincial rules of business) may be carried out for providing timely assistance to those who are in need.

ECC approved Rs. 50 billion for Utility Stores Corporation to provide essential food items to the vulnerable section of the society at subsidized rates. USC has prepared an initial plan to deliver 9 essential food items @ Rs 3000 for a family of 2+4 people through Pakistan Post Foundation Logistics Division. USC has further planned to procure essential items within 2-3 weeks. it was  directed that USC may engage with BISP to obtain data for targeted assistance and again come back to the ECC for a detailed proposal for reaching out to the poor families for the effective use of this package before making any expenditure from this amount.

ECC also approved Rs.75 billion for FBR to enable them to payback the sales tax and income tax refunds, duty drawbacks and customs duties which is due for the last 10 years. The amount shall help approximately 676055 beneficiaries by improving their liquidity position.

ECC also allowed to reduce different taxes and duties on import and supply of different food items for alleviating the adverse impact of COVID -19 on different sections of the society. Rate of advance tax on the import of different pulses was reduced to 0% from 2%. individuals and associations of persons providing tea, spices, dry milk and salt to USC without a brand name will pay 1.5% withholding tax instead of 4.5%. Individuals and AoP receiving payments from USC for supplying ghee, sugar, pulses, and wheat flour shall be charged 1.5% withholding tax instead of 4.5% earlier. ACD (additional customs duty) @ 2% on soya bean oil, canola oil, palm oil and sunflower oil (and on these four oil seeds) has also been exempted.

ECC approved the supplementary grant of Rs. 30 billion to Ministry of Commerce to payback duty drawbacks to textile exporters in the current financial year to improve their liquidity position when their businesses are experiencing a slow down due to worldwide outbreak of Corona epidemic. ECC was briefed SBP is working on payment of claims worth Rs. 49 billion out of which around 40 billion will be paid by June 2020.

ECC approved supplementary grant of Rs. 6 billion for Pakistan Railways to meet its expenses. Pakistan Railways has suspended its passenger train services around the country since 19-3-2020. The approved amount shall be utilized for paying salaries to 70,000 employees, repairs, paying for utilities and performing disinfectant sprays on platforms and inside trains for proving safe journey to the passengers. Currently Pakistan Railways is earning only 1/6th of its monthly income through coal freight and the rest is suspended.

March 26, 2020 (PR No. 282)

Adviser to PM on Finance and Revenue chaired a meeting ECNEC

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting the Executive Committee of the National Economic Council (ECNEC) here at the Cabinet Division.

ECNEC approved the “Toiwar/ Batozai Storage Dam Project District Killa Saifullah, Balochistan at the 2nd revised cost of Rs 4905.667 million. Irrigation Department Government of Balochistan will execute the project. The project will provide storage of 95000 acre feet of water 16750 acres of land will be brought under cultivation. Prevention from flood damages and improvement of socio economic conditions are other benefits of the project. ECNEC directed the government of Balochistan to ensure the completion of the project within revised approved scope and cost.

 The Naulong Dam Project- Updated 2nd Revised PC-I at a total cost of Rs.28,465 million, was given approval in principle to enable Economic Affairs Division to start negotiation with Asian Development Bank for finalizing details of project financing. ECNEC also directed to constitute a committee under Minister EAD, Minister Planning Development and Reforms, Deputy Chairman Privatization Commission, representative from Ministry of Water and Power and Government of Balochistan to discuss the issues related with preparation of second revised PC-I of the project. The committee will give its input within 2 weeks time.

Operationalization of Green Line BRTS and Installation of integrated Intelligent Transport System Equipment- updated Modified PC-I was approved by ECNEC at the total cost of Rs.10,956.16 million with Rs. 53,16.68 million as FEC.

National Electronic Complex of Pakistan, Phase 1 in H-9/1 sector Islamabad at a revised total cost of Rs.16,081.617 million. Out of this total budgeted cost Rs.13, 371.729 million has been provided by China as loan and grant. The Project will help in technology acquisition for achievement of self-reliance in research, design and manufacturing in the following fields. 1:Information and Communication Assurance for e-Governance,2:  Early Warning Systems for Disaster Management, 3: Electronic Measures for security of National Assets,4: Electronic Exploration of Natural Resources at Land/ Sea, 5: Designing and Fabrication of integrated Circuits and Systems on Chip,6: Communication, displays, automation and medical systems. It is expected that the project shall be completed by June 2022.

National Program for enhancing the Command Area in Barani Areas of Pakistan was approved at a  total cost of Rs.25,345.672 million. The project scope includes construction of 2664 farm ponds for storing rainwater from various sources and installation of solar pumping systems on farm ponds for operation of high efficiency of irrigation systems. Development of 4156 dug wells to promote irrigated agriculture. Development / improvement of 2432 watercourses carrying water from various sources for enhancing water conveyance efficiency at farm level and building other beneficial infrastructures and provision of useful equipment for farm land development.

Dualization and Improvement of Mandra-Chakwal Road Project ( 2nd Revised) at Districts Rawalpindi and Chakwal at total cost of Rs. 11892.639 million. The project will be completed from federal PSDP.
March 26, 2020 (PR No. 281)

Adviser to PM on Finance and Revenue chaired a meeting ECC

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 here at the Cabinet Division.

Four technical supplementary grants (1: Rs. 275 million in favor of Ministry of Housing and works for capital outlay on civil works, 2: Rs. 84,352,265 equivalent to $ 532,152 to be provided to NADRA for FATA TDP Emergency Recovery Project, 3: Rs, 5500 million for Sustainable Development Goals Achievement Program, 4: Rs. 5 billion to NDMA for fighting the spread of Corona virus on emergency basis) were approved by ECC. The technical supplementary grant approved for NDMA shall be utilized to gain logistic support and the provision of different types of personal protection equipments against the virus like respirators/face masks etc.

ECC formed an inter-ministerial committee, to firm up proposals in a month’s time on incentive package for National Electric Vehicle policy, comprising Minister Planning & Development, Minister Science and technology, SA PM on Austerity and Institutional Reforms , Deputy Chairman Planning Commission, SA PM on Commerce (Chairman), SA PM on Petroleum, Secretaries Industry and Climate Change.

ECC acknowledged the role and efforts made by Ministry of Climate Change on preparing Incentive proposals for National Electric Vehicle Policy.

ECC also approved Quarterly adjustments of tariff of K-Electric limited for the period from July 2016 to March 2019. As a relief measure for the people of Karachi amidst Corona Virus outbreak and in Ramazan, ECC directed to notify the tariff after 3 months in the meanwhile directed Finance and Power Division to facilitate K- electric by advance provision of subsidy amounting to Rs. 26 billion. The ECC was briefed that the revision of tariff would have an impact of Rs 1.09 to Rs 2.89 /Kwh for various categories of consumers.

On the summary moved by the Ministry of Energy Power Division on execution of LPG Air Mix supply projects by Sui Companies, ECC decided to continue the operation of two already installed and working plants at Awaran and Bella and approved the installation of another four plants at Gilgit, Drosh, Ayun and Chitral town where the equipment has already been procured for plant installation.  The work on other projects of the same nature was stalled as it required a huge amount of subsidy to both SSGPL and SNGPL. It was briefed to the ECC that SNGPL requires Rs. 19.851 billion per annum for operation of 16 projects and SSGCL will require Rs. 14.474 billion to operate 32 approved projects. ECC decided that the Ministry of Energy should engage with the Government of Balochistan and decide upon more efficient projects which would give the maximum benefit to the population of Balochistan province within the same amount of allocation/subsidy. The decision was taken in the context that the existing revenue shortfall of SNGPL was Rs. 143 billion and for SSGCL Rs 72 billion as of end 2018-2019.

ECC also decided to allocate 5.0 MMCFD gas from Saand#1 to M/S SSGCL. The price of gas shall be according to the petroleum policy.
March 24, 2020 (PR No. 280)

Adviser to PM on Finance and Revenue chaired a meeting to streamline funding for relief measures

Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a meeting here at the Finance Division to smoothen the funding for accelerating the work on relief measures amid the Corona virus outbreak in the country.

The meeting was attended by Minister for Economic Affairs, SA PM on National Health Services, CEO NDMRF, Secretaries Finance, Economic Affairs Division, National Health Services and Chairman NDMA.

Minister for Economic Affair gave a briefing on the availability of funds that can be utilized for the provision of relief to the people. Chairman NDMA and CEO NDMRF shared their strategies for procurement of medicine and other relief equipment for timely and effective measures against the pandemic. All participants shared their level of preparedness for dealing with any emergency situation and showed firm resolve to serve the people in the time of need.

The Adviser directed Secretary Finance to make use of the best of his judgment to eliminate any procedural hurdles that are in the way of provision of funds for the relief measures for the people while ensuring transparency and simplicity of the process.
March 22, 2020 (PR No. 279)

Adviser to PM on Finance and Revenue met with Governor Sindh

Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a meeting here at the Finance Division today with the Governor Sindh Mr. Imran Ismail and Business community from Karachi through video conferencing. Advisers to Prime Minister on Commerce and Austerity and Institutional Reforms and Petroleum were also present during the meeting.

The businessmen included representatives from the garments and textile sector, pharmaceutical industry, Pakistan Stock exchange and tourism and hotel industry, gave proposals regarding the issues they had been facing and the assistance they require from the government in the times of this crisis. They requested that they should be enabled to look after their daily wagers in the next 2-3 months times and be provided with assistance to carry on their business with improvement of their liquidity position.

The Adviser to PM said, “the government is faced with a challenging situation and in this challenging situation, the prime objective of the government is to do three things. A) Contain the Virus, B) provide health care facilities, essential food items at affordable rates and help to maintain enough cash in hand to the common man and C) provide help and assistance to the business community to run their businesses during the times of the pandemic without a permanent set back to the economy. For this we are seeking proposals and working on them, we are hoping to give a plan that is simple and implementable to meet our objectives.” He further said “have faith that the government is there to support you”.

On the request of the business men the secretary finance told that SECP has given proposal and mechanism to home department Sindh to help in running business/ trading at stock exchange Karachi. The food industry shall remain open and continue business as usual and wherever needed the federal government will have dialogue with the provincial government to facilitate the business and trader community. Governor Sindh told that they have prepared food bags with the help of USC for the needy and shall soon be distributed. Governor Sindh also assured of his assistance wherever needed.

In the end the Adviser asked the business community to look after the daily wagers and workers who are outside the registered regime as helping them is also our social responsibility.
March 22, 2020 (PR No. 278)

Adviser to PM on Finance and Revenue met with Dr. Sania Nishtar

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh met Special Assistant to the Prime Minister on Social Protection and Poverty Alleviation Dr. Sania Nishtar on Sunday to discuss and finalise the contours of the special relief package being prepared by the Government for the people in the wake of Corona virus epidemic.

During the meeting, different options and proposals as part of the proposed package were discussed. Secretary Finance Naveed Akram Baloch, Special Secretary Finance Mr. Omar Hamid Khan and other senior officers of the Finance Division also attended the meeting.

March 20, 2020 (PR No. 277)

Adviser to PM on Finance and Revenue chaired a meeting with a delegation of Exporters

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a meeting here at the Finance Division with a delegation of Exporters to discuss various issues exporters have been facing after the outbreak of Corona Virus and the evolving position of the global economies and its impact on the export sector of Pakistan. Advisers to PM on Commerce and Textile and Austerity and Institutional Reforms were also present during the meeting.

The delegation briefed the Adviser that due to the outbreak of the corona virus pandemic the global economies have gone into a recessionary phase and the demand for their products especially apparel has reduced to a considerable level. The exports which had shown an improvement in the February and March will receive a setback in the coming months. In view of the changing position of the global trade they had been facing problems with their cash flow situation and need help and assistance from the government mainly in expediting the re-payments/ refunds due so that they could come out of this crisis and could resume their business as early as possible.

The delegation presented a list of proposals to the Adviser Finance that could help them improve on their liquidity position and to run their businesses in the current situation when they are not expecting further orders and faster recoveries from their international buyers. The delegation apprised the Government that they have decided not to lay off their daily wage staff in this difficult time.

Dr. Hafeez Shaikh, while discussing each and every proposal in detail with the exporters said “I would like to make a statement here that the Government has no desire or policy to keep the money even a day longer that belongs to the exporters and nor do we find any reason to delay the repayments.” We shall do whatever possible to ease out the exporters and committed to provide them relief with earlier repayments of export rebates/ duty drawback and GST refunds, he added. He said that the GST refunds will be cleared within March and export rebates will be granted within April. He further directed Secretary Finance and Chairperson FBR to hold meetings with the relevant stakeholders and provide relief to the Export sector as much possible for the government. He appreciated the decision taken by APTMA not to lay off their labour in the time of crisis and advised them to take care of their workers as the government is taking care of them.
March 18, 2020 (PR No. 276)

Delegation of All Pakistan Audit and Accounts Association met with Special Secretary Finance

A delegation of All Pakistan Audit and Accounts Association (Combined) met the Special Secretary Finance Mr. Omar Hamid Khan on their request to highlight issues on account of promotions and increase in salary / allowances. The following issues were discussed:-

  1. 120% increase in salaries, which includes 100% increase in salary plus 20% secretariat allowance.
  2. Long pending promotions of Accounts Officers and Assistant Accounts Officer.
  3. Pending cases of Time Scale.
  4. Service Reforms for Officer of Accounts Service.

During the meeting, Accountant General Pakistan Revenue was also present. The Special Secretary Finance listened to their views in the matter and assured them that the Finance Division shall help in resolution of all their issues. He mentioned that recommendations to increase the salaries will be made in due course.

Regarding regular promotions and time scale, he committed to ask the CGA to expedite the process. He further mentioned that the time scale is under discussion with Establishment Division for a career planning approach and the decision as taken broadly will be implementable for Accounts Officers, Assistant Accounts Officers and Senior Auditors, as well.

The Special Secretary Finance advised them to prepare proposals for their service structure and he would arrange a meeting of their representatives with Adviser to the Prime Minister on Institutional Reforms.

In the end, the Association assured full cooperation from their side based on assurances by the Special Secretary.

March 18, 2020 (PR No. 275)

Adviser to PM on Finance and Revenue chaired a meeting of ECC

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 here at the Cabinet Division.

The Ministry of Overseas Pakistanis & Human Resource Development presented a report of the Task Force on Overseas Employment and Welfare of Overseas Pakistanis. ECC in its earlier decision of 19th Feb 2019 had constituted an inter-ministerial task force under the chairmanship of Special Assistant to the Prime Minister on Overseas Pakistanis and Human Resource Development to look into the issues of overseas employment for Pakistani manpower and make recommendations in consultation with relevant stakeholders. Special Assistant to the Prime Minister for Overseas Pakistanis and Human resource development, Mr. Zulfi Bukhari gave a presentation on various important issues and the measures taken regarding:

  • Identification of trades and skill sets in demand in order to meet the requirements of international job market
  • Development of a centralized TVET certification and verification system and improving regulatory mechanism for curbing sub-standard certifications and helping provincial TEVTAs in developing their skill development capacities
  • Developing mechanism for sharing data among NAVTTC and BE&OE/OEC on employment opportunities and available skills
  • Efficient provision of E-Passport, NICOP, POC to overseas Pakistanis
  • Issues of overseas Pakistani Schools
  • Developing a National Emigration and Welfare Policy for Overseas Pakistanis

The Chair appreciated different measures taken by the Committee and further directed the Committee to come to the ECC forum, a month after the budget, and brief on the overall progress made on the measures taken by the Committee for the welfare of overseas Pakistanis.

ECC also approved a Technical Supplementary Grant of Rs.4152 million for FBR from Pakistan Raises Revenue Program to meet the mandatory and inevitable expenditures for the achievement of DLIs and supplement budgetary resources for expenditures in this regard. ECC also directed Chairperson FBR to give a detailed briefing on the initiative to the ECC in the next meeting.

On the request from the Ministry of Maritime Affairs for the recovery of outstanding wharfage of Rs. 1.696 billion on import of LNG by PSO, ECC directed that the outstanding amount will be paid in 10 equal installments without interest over a period of next ten years. However in Jan 2023, a committee will review the circumstances and suggest any possibility for early repayment of the remaining sum. The decision was taken on the recommendations of the committee constituted under the chairmanship of Minister for Economic Affairs.

ECC approved the Technical supplementary Grant of Rs. 44.447 million for Islamabad Capital territory to execute “National Program for improvement of Watercourses phase ii in ICT, Productivity Enhancement of wheat, Prime Minister’s Initiative for save the calf, calf feedlot fattening in Pakistan and development of backyard poultry in ICT”. Ministry of National Food security and research had surrendered the amount in favor of ICT Administration.

March 16, 2020 (PR No. 274)

Adviser to PM on Finance and Revenue chaired a meeting on Pakistan Economy

Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh chaired a meeting here at the Finance Division to review the progress being made by the major sectors of the economy.

Ministers for Energy and Economic Affairs Division, Chairperson FBR and Secretaries of Finance Division, Ministry of National Food Security and Research and Ministry of Commerce attended the meeting.

The participants of the meeting shared the details of the ongoing major initiatives of their respective Ministries and Divisions, their current status of progress to meet the targets set during the current financial year, the impact of the ongoing corona virus epidemic on the economy and the strategy to achieve the targets with maximum success. It was agreed during the meeting that all sectors related with the economy will work in unison to achieve the economic targets with maximum effort and that the government will ensure that the common man is not affected by any adverse fallout of the epidemic.

March 16, 2020 (PR No. 272)

Adviser to PM on Finance and Revenue chaired a meeting of ECNEC

Adviser to the PM on Finance and Revenue Dr Abdul Hafeez Shaikh chaired the meeting of the Executive Committee of National Economic Council (ECNEC) here at the Cabinet Division today.

The Winder Dam Project, which is to be constructed across Winder River in District Lasbela, Balochistan, was approved by ECNEC at the total cost of Rs. 15,230.76 million without FEC with the condition that command area development and land acquisition components will be started in parallel to the main project by the Government of Balochistan. The Govt. of Balochistan will ensure completion of the project within approved scope and cost. In case of further revision, increase in cost will be borne by the provincial government from own resources. It is expected that the project will be completed in four years time.

Kachhi Canal Project( Remaining works of Phase-I) at District Dera Bugti, Balochistan Province was also approved at the revised cost of Rs. 22,921 million without FEC with the recommendation that there will be no deviation from scope and cost firmed by the follow up committee constituted by CDWP. A component of detailed engineering design / tender documents/ PC-Is for phase II and phase III costing Rs.120 million has been added in the cost summary of this project which will be actively pursued. The Balochistan Agriculture Department will ensure resolution of land settlement issues and development of command area of 102,000 acres to be developed by December 2020. The responsibility of technical soundness of design will rest with the project consultants NESPAK and no deviation from the design will be made. The project shall be completed in 3 years from the date of approval.

The Pakistan Raises Revenue Project including its IPF Component (For FBR Headquarters Islamabad) was approved at the total cost of Rs. 12,480 million with FEC component of US$ 80 million. The aim of the proposed program is to eliminate country’s fiscal constraints through sustainable increasing revenues and reducing tax expenditure by broadening tax base and modernizing Federal Board of Revenue with advanced ICT based operations under its Transformation Roadmap. The proposed project is part of World Bank’s funded IDA soft loan amounting to US$ 400 million. The loan has two components i.e US$ 320 million for Result based / Disbursement Linked Indicators (DLI) based financing, and US$ 80 million for its traditional investment project Financing (IPF). Up-gradation of connectivity of FBR offices through installation of ICT equipment at all FBR offices and Customs control posts for data sharing and communication is envisaged under this project. The Chair directed that FBR shall give a detailed presentation on the strategy for the utilization of the funds specially the DLI component and its impact on the Human Resource Building at FBR in the next meeting of ECNEC.

EX- Post Facto approval for the Development of Kartarpur Sahib corridor on EPC/ turnkey basis phase- I (Gurudwara Kartarpur Sahib District Narowal) at a modified cost of Rs. 16546.2 million was also granted by ECNEC.

Lahore Water and wastewater Management Project – Sewerage System from Larech Colony to Gulshan-e Ravi, Lahore (Through Trench _Less Technology) was approved by ECNEC at the revised cost of Rs. 14430.506 million. The cost includes Rs. 14,165.06 million AIIB loan (US$256 million) in addition to already incurred amount of Rs 265.446 million. The project aims at comprehensive and detailed design of sanitation system for disposal of sewerage and wastewater from Larech colony to Gulshan-e Ravi, Lahore through trench less technology. The project intends to ensure efficiency in safe and quick disposal of sewage / waste water by laying of trunk sewerage system and to develop a comprehensive, technically viable plan.

The construction of Eastern Wastewater Treatment Plant (44 MGD) of Faisalabad City ( Phase-I) at the total cost of Rs. 19,071.222 million was approved by ECNEC. The foreign component of the project includes loan and grant from the government of Denmark (DANIDA) amounting to Rs. 17, 238.179 million, 35% of this amount is grant and loan component is 65%.

The Chair directed to set up a committee with Minister EAD and Deputy Chairman Planning Commission to prepare a mechanism for planning disbursement of necessary aid in a fair and transparent manner where all provinces have an equal chance of getting a fair share according to their developmental needs and the priorities of the Government of Pakistan.

March 13, 2020 (PR No. 271)

Adviser to PM on Finance and Revenue reviewed Proposals for Export Promotion

Adviser to the Prime Minister on Finance and Revenue chaired a meeting here at the Finance Division to review the proposals for the facilitation of Exports Oriented Sectors with special focus on small and medium enterprises which can play a more vibrant role in export promotion with provision of certain facilities by the Government.

Adviser to the Prime Minister on Commerce Abdul Razzaq Dawood and Mr. Ali Habib gave a detailed briefing to the participants of the meeting on improving the system of duty drawbacks and export rebates that could help with the cash flow situation of the exporters and reduce the burden through automation and reduced tiers for verification. Other proposals included updating the lists of rate of rebates offered on different exported items and provision of funds to SBP for clearing rebates in a faster manner. The meeting was briefed that 26 sectors, which can provide exportable materials, have put forward their suggestions for the facilitation and promotion of exports from the country and some of the proposed measures do not even require any monetary contribution from the government.

Adviser Finance appreciated the work done by the Commerce Ministry and the input given by FBR and Customs on the proposals. He said that the Government aims to provide ease with maximum degree of automation and transparency to the exporters. He directed the Ministry of Commerce to hold further discussions with all stakeholders and prepare draft proposals for making an effective policy for increasing the volume of exports from the country. He said all possible cooperation in the matter shall be provided by the Ministry of Finance and the needful will be done in the next budget.

March 12, 2020 (PR No. 270)

ECC fixed minimum support price for wheat at Rs 1,400 per 40kg

Economic Coordination Committee (ECC) of the Cabinet on Thursday fixed the minimum support price of wheat at Rs 1,400 per 40 kg to ensure parity in wheat prices throughout the country and set up a high-level Wheat Procurement Monitoring Group to ensure a smooth procurement of wheat by the public sector departments in the upcoming harvest season.

Earlier, the ECC in its meeting held on 19th February 2020 had decided to fix the minimum support price of wheat crop 2019-20 at the level of Rs 1,365 per 40 kg. However, a meeting of Wheat Review Committee convened on 9th Mach 2020 under the chairmanship of National Food Security & Research Minister Makhdoom Khusro Bakhtiar and attended by the Food Ministers of KP, GB and AJK and secretaries of Food Departments of various provinces had recommended enhancement of support price of wheat for wheat crop 2019-20 from Rs 1365 per 40 kg to the level of Rs 1400 per 40 kg.

The ECC meeting held at the Cabinet Block with Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh in the chair today, discussed the support price for wheat in detail and decided to fix the price of wheat at Rs 1,400 per 40 kg to ensure parity in wheat prices throughout the country.

The ECC also set up a Wheat Procurement Monitoring Group comprising National Food Security & Research Minister Makhdoom Khusro Bakhtiar, Railways Minister Sheikh Rasheed Ahmad, Economic Affairs Minister Muhammad Hammad Azhar and Special Assistant to Prime Minister on Petroleum, Nadeem Babar. The Group would coordinate with the provincial governments, involve the public and use technology to ensure the process of wheat procurement by the PASSCO and provincial governments in the coming harvest season was carried out in an efficient and transparent manner.

The Wheat Procurement Monitoring Group would also ensure that the allied issues related to incidental charges, supply of adequate gunny bags to farmers and procurement of wheat by provinces and the private sector as per plan and targets were properly streamlined and addressed to provide a level-playing field to all stakeholders, including the public in terms of provision of flour at the lowest possible price throughout the year.

Earlier, the ECC was given a detailed presentation on the arrangements made for the procurement of enhanced target of 1.8 million tonnes by the PASSCO which also shared with the ECC an enhanced efficiency model in procuring increased target and mechanism to rationalise the incidental charges.

Besides the wheat issue, the ECC also discussed the falling prices of oil in the international market and its impact on the national economy and announced the benefit of the reduced oil prices in the global market would be passed on the consumers in Pakistan in due course of time as per the mechanism already being followed by the government.

The ECC also approved a technical supplementary grant of Rs 12.813 million of Inter Board Committee of Chairman in favour of Ministry of Federal Education and Professional Training and another technical supplementary grant amounting to Rs 13.02 million in favour of Human Rights Division.

The ECC also approved the Annual Report of Competition Commission of Pakistan (CCP) for the Financial Years ended 2015, 2016 & 2017, and asked the CCP to give a detailed presentation to ECC in the next meeting on the overall scope of its work and what had been achieved by the Commission so far with regard to its mandated role to ensure fair competition in different sectors of economy it governed.

March 12, 2020 (PR No. 269)

Finance Division to propose suitable Pay raise in next Budget

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.

March 12, 2020 (PR No. 267)

Adviser to PM on Finance and Revenue chaired the meeting of the NFC Monitoring Committee

Adviser to the Prime Minister on Finance and Revenue Dr.Abdul Hafeez Shaikh chaired the meeting of the NFC Monitoring Committee here at the Finance Division today. Provincial Finance Ministers of Khyber Pakhtunkhwa and Balochistan were also there while Punjab and Sindh were represented by their Finance Secretaries.

The meeting was convened to seek approval of the bi-annual report on the implementation of the NFC Award for the periods of July –December 2018 and January – June 2019 and the establishment of the National Tax Council (NTC). The reports which were approved by the NFC monitoring Committee shall be presented in the National and Provincial Assemblies under the requirements of the Article 160 (3B) of the Constitution. The bi-annual reports contain the information on Distribution of Revenues and Grants in Aid to the provinces under NFC Award announced in 2010 (7th NFC Award). The report also contained the inputs from the provinces. The reports were endorsed by the provinces.

The Bi-Annual Report of Period July- December (FY 2018-19) stated that out of FBR’s divisible pool collection of Rs.1949.752 billion, Rs.1121.207 was the provincial share. Punjab had 580.061 billion, Sindh 275.232 billion, KP 163.906 billion, Balochistan got 101.909 billion. In addition to these transfers KPK received 1% as war on terror fund of 19.694 billion, Balochistan additionally 10.149 billion and Sindh OZT grant 7.399 billion. Straight transfers for the period were Rs.48.225 billion.

In addition to the divisible pool funds, Rs. 19.708 bn were given to KPK for WoT, Balcohistan additionally received 10.079 billion and Sindh got OZT grant of 7.404 billion. Straight transfers of Rs 46.826 were also made to the provinces during the period under four heads of royalty on crude oil, royalty on natural gas, gas development surcharge and excise duty on Natural Gas.

During the meeting suggestion were also presented for sales tax harmonization in Pakistan. Pursuant to the decision of CCI dated 24th November 2017, the framing of ToRs of the Fiscal Coordination Committee (FCC) was assigned to the NFC Monitoring Committee. The said ToRs were framed and approved in today’s meeting. The terms of reference state the FCC shall review and discuss the fiscal policy issues of the federal and provincial governments and suggest solutions. It will monitor current and development expenditures of the federal and provincial governments. The discussion on issues related to FBR receipts shall also fall under the ambit of this committee. The review of debt stock of the federal and provincial governments in the perspective of FRDL Act, discussion on the position of provinces’ own receipts and suggestion of measures for enhancement of provincial revenues and the review of cash balances of the federal and provincial governments are also assigned to the Committee.

The composition of National Tax Council and its proposed ToRs were also approved in the meeting. The Provinces are represented in the National Tax Council and it shall enable them to decide collectively the rate for sales tax for both goods and services. It was proposed during the meeting that the National Tax Council shall meet at least once in every quarter and the recommendations of the NTC shall be expressed in terms of majority and shall be placed before NFC Monitoring Committee.


March 05, 2020 (PR No. 266)

Finance Secretary chaired the meeting of National Price Monitoring Committee (NPMC)

A meeting of the National Price Monitoring Committee (NPMC) was held with Finance Secretary in the chair today (Thursday) to discuss the prices of essential food and stock of supply of the essential items.

The meeting held at the Finance Division was attended by the representatives from the Provincial governments, Islamabad Capital Territory, Ministries of Industries, Interior, Law & Justice & Human Rights, Planning, Development & Special Initiatives, National Food Security and Research, Federal Board of Revenue, Competition Commission of Pakistan , Pakistan Bureau of Statistics and Utility Stores Corporation.

The meeting discussed the trend of Consumer Price Index (CPI), which is a headline measure of inflation. It has been observed that prices of food items such as pulses, fresh vegetables and wheat which have been the main top drivers of inflation saw a downward trend on the monthly basis. The meeting was informed that CPI inflation decreased by 1.0% on MoM in February 2020 over January 2020. However on YoY, recorded at 12.4% in February 2020 over February 2019 and July-February CPI inflation on YoY reached to 11.7% (6.0% last year). It was stated by the Secretary Finance that the government is committed to reducing inflation and more steps are underway in coming months.

It was noticed that Sensitive Price Indicator (SPI) which monitors the price movement of 51 essential items on weekly basis recorded a decrease of 1.16% for the week ended on 27th February, 2020. During the week, 13 items recorded decline in their prices while 25 items remain stable. This was the third consecutive decline in SPI during the month of February 2020.

The Committee also discussed the price movements of these items among the provinces/ICT and observed variations in price level. The provincial governments also informed that they are proactively monitoring the prices as well as supply of essential food items. Price trend in international market are on declining trend which would augur well for the domestic prices in near future.

The meeting also discussed the outbreak of novel coronavirus and its impact on demand and supply of essential items. The Chair advised that all relevant authorities along with provincial governments should in close coordination monitor the provision of essential food items at affordable prices keeping in view the forthcoming Ramadan. He further stressed to check the undue profit margin exists between the wholesale and the retail level, which should be prevented.

The Chairperson Competition Commission of Pakistan (CCP) informed that they are holding a meeting in second week of this month with all stakeholders to discuss Food Laws and developing a uniform formula for pricing to remove price disparity among districts.

The Chair emphasized that the provincial government should play a proactive role in checking hoarding and undue profiteering to ensure smooth supply of essential food items at reasonable prices.

March 05, 2020 (PR No. 265)

UNFPA Country Representative called on Adviser to PM on Finance and Revenue

Ms. Lina Mousa, Country Representative United Nations Population Fund (UNFPA) on Thursday called on the Adviser to the Prime Minister on Finance & Revenue Dr. Abdul Hafeez Shaikh at the Q Block to discuss ways for further strengthening her organisation’s strategic partnership with Pakistan.

During the courtesy call-on, the UNFPA country representative briefed the Adviser on various initiatives undertaken by the UNFPA with different ministries and departments both at the national and provincial level in the areas of population & development, family planning & reproductive health, data for development, youth and gender.

Dr. Abdul Hafeez Shaikh lauded the efforts of UNFPA, particularly the technical and financial support for enhancing the national capacity on population related issues and wished the partnership would be further strengthened in the coming years.

March 04, 2020 (PR No. 264)

ECC approved measures to boost remittances through formal channels

The Economic Coordination Committee (ECC) of the Cabinet has approved a host of measures to encourage and facilitate the overseas Pakistanis to send their remittances through official banking channels.

The approval was granted at a meeting of the ECC held at the Cabinet Block today with Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh in the chair. Under the decision, following measures for the enhancement of home remittances through banking channels were approved:

  1. The rebate of reimbursement of T.T. Charges transactions between USD 100 and USD 200 will be increased from SAR- 10/- to SAR-20/-.
  2. 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% growth, Rs. 0.75 per 1USD on 10% growth and Rs. 1/- per 1USD on 15% growth.
  3. The amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.
  4. 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.
  5. 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 Mr. Omar Ayub Khan, Minister for Economic Affairs Mr. 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 % 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.

March 02, 2020 (PR No. 263)

Economic Outlook is strong -- Adviser to PM on Finance and Revenue

Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh has said the outlook for the economy is strong and pick up in exports and remittances are supporting growth momentum.

“In December 2019, the large scale manufacturing output expanded by 16% on month on month basis, indicating that growth is starting to pick up,” he said while talking to a group of television anchorpersons at his office on Monday.

The meeting was part of the Advisor Finance efforts to update the media and public on key economic policies and progress on reforms. The meeting was also attended by MNA Ms Kanwal Shauzab and Mr Omar Hamid Khan, Special Secretary Finance.

Dr Abdul Hafeez Shaikh shared updates on the recently-concluded 2nd review of the IMF staff by saying that the IMF staff concluded that “all end December performance criteria were met, and structural benchmarks have been completed.” “This has led to the IMF staff and Pakistan authorities reaching a staff level agreement which has paved the way for the IMF Board to release the next tranche of U$ 450 million in April 2020.

The Adviser also highlighted that the government had achieved a primary surplus of 0.6% of GDP (Rs 286bn) in first half of the FY2020, first time in over 10 years. “This has been achieved through stronger revenue collection with FBR tax collection rising by over 16.5% and through austerity in expenditure,” he said.

He further said that the non-tax revenue collection during the first half of the FY2020 had also gone up by 170% on year-on-year basis to reach Rs 876 billion (Rs 323 billion in same period last year) which would help reduce the build-up in debt. “During the first two years of the current government, over Rs 5 trillion in debt had been repaid to domestic and international creditors,” he added.

Dr Shaikh expressed concern over high inflation and apprised the participants on government efforts to reduce the burden on public. He highlighted that inflation has declined in the last 7 weeks and CPI inflation has declined to 12.4% in February 2020, down from 14.6% in January 2020 as a result of proactive measures by the government to allow imports and increase supply through utility stores.

He said the government had doubled allocation in social safety programmes under the Prime Minister’s Ehsas Program to Rs 192 billion in FY20. However, many challenges remain particularly in resolving the energy sector challenges, he added.

February 26, 2020 (PR No. 262)

Secretary Commerce, USA called on Adviser to PM Finance and Revenue

Mr. Wilbur Ross, Secretary Commerce of the United States of America, along with the accompanying delegation, called on the Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division.

The Adviser welcomed the Secretary Commerce and said that Pakistan and United States had maintained a durable relationship over the years and there was a need to build it further. The Adviser said that the arrival of the delegation from the commerce sector is good news for Pakistan and would have positive consequences for the country. “This is at a time when the government is looking forward to a major boost in exports after offering concessions to the export oriented sector of Pakistan.”

The Adviser said that Pakistan was trying to carve out a new progressive image in the comity of nations. We have tried to follow the FATF action plan to a significant level, opened our markets to the foreign investors by providing ease of doing business and we are trying to build our image as a tourism-friendly and investment-opportunity country in the region. The Adviser also shared the updates on the economy with the US Secretary of Commerce. He said that though the country is trying to revive the economy through stabilization reform and inviting foreign investment to the country as well as taking care of its vulnerable, the rising prices of food items, high energy prices and slow revenue generation were issues that concerned him. He said that the Government’s efforts are directed towards providing ease to the common man and it would require guidance from its global partners as well. The trade between the two countries is only around $7 billion and the country has an urgent need to increase that to help in GDP growth which requires long term planning for economic development. He said that we have made a mistake in the past of not forming our alliances on the economic front based on our developmental requirements. He felt this was the time to enable the relationship to become more long lasting on a firm footing.

The US Secretary Commerce said they can help Pakistan in the energy sector and the details of the projects where economic cooperation could be enhanced are being worked on. The Adviser said that he hopes that a healthy interaction shall continue in future as well.

February 25, 2020 (PR No. 261)

Adviser to PM on Finance and Revenue chaired the meeting of CCOP

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Cabinet Committee on Privatization (CCOP) here at the Cabinet Division.

CCOP was given an update on the Privatization program. The Committee was briefed that in case of the SME Bank Limited and Pak Reinsurance Co. Ltd (up to 20% divestment) the privatization process is moving ahead in a relatively faster manner and they are expecting to complete the process in the required time frame. On the status of the revival of Pakistan Steel Mills CCOP gave directions to the Privatization Commission to complete all the standard requirements in a regular but expeditious manner and keep on updating the Government on any issues that may surface during the smooth running of the process.

On the proposal of the “Privatization of the Guddu Power Plant (747 MW)” Ministry of Privatization briefed that they have received EoIs from Financial Advisers and parties have been shortlisted for issuance of request for proposals. Other issues related to the transaction were also discussed. CCOP directed that there is a need for further discussion on the project between NEPRA, Power Division and Ministries of Finance and Privatization. CCOP directed that they should come up with a joint proposal in the next meeting of CCOP for moving ahead in the transaction so that it may complete within the given time frame.

For divesting shares of OGDCL, CCOP directed that the matter requires further deliberation. CCOP directed that all the relevant stake holders including the Ministry of Energy to come up with a presentation on the proposal in the next meeting.

The Chair directed that all the processes related to the Privatization Process may be carried out in a transparent but expeditious manner so that all the targets are achieved within the given time frame.

February 21, 2020 (PR No. 260)

Adviser to PM on Finance and Revenue thanks China on support in FATF meetings

Adviser to the Prime Minister on Finance and Revenue met Mr. Yao Jing, Ambassador of the People’s Republic of China here at the Finance Division to review the preparations of the upcoming visit of the Chinese President Xi Jinping. The meeting took place on the instructions of the Prime Minister as the government has attached significant importance to this meeting.

The Adviser and the Ambassador shared the details of progress of preparation of the upcoming visit of President Xi Jinping. The Adviser said that Pakistan values the relations with China highly and would welcome the President with highest respect and regards. He also thanked the Chinese Government on their massive support in the FATF meetings. The Adviser said that China and other brotherly countries have supported Pakistan throughout the Process in terms of guiding the country to improve its frameworks

The Adviser condoled with the Ambassador on account of the Virus outbreak. The Ambassador said that it is a difficult time for the people of China but we are dealing patiently with the calamity and hoping to overcome it very soon. The Ambassador thanked Pakistan on the support in this difficult time.

They also discussed progress on China Pakistan Economic Corridor (CPEC) and measures to enhance the bilateral trade between the two countries stating that it was progressing smoothly. Matters of bilateral interest were discussed and both sides agreed to enhance economic cooperation in future.

February 21, 2020 (PR No. 259)

FATF Plenary and Working Group Meetings in Paris, France

The Financial Action Task Force (FATF) Plenary meeting was held in Paris from February 16-21, 2020. The Pakistan delegation was led by Mr. Muhammad Hammad Azhar, Minister for Economic Affairs Division.

During the last reporting period, Pakistan has made significant progress in the implementation of FATF Action Plan, which has been demonstrated by the completion of 9 additional action items.

FATF reviewed progress made by Pakistan towards implementation of the Action Plan, while acknowledging the steps taken by Pakistan towards implementation of Action Plan and welcoming its high level political commitment, FATF highlighted the need for further actions for completing the Action Plan by June 2020. FATF members agreed to maintain Pakistan’s status on FATS’s Compliance Document, normally referred as the Grey List.

The Government of Pakistan stands committed for taking all necessary action required for completing the remaining items in the Action Plan. A strategy in this regard has been formulated and is being implemented.

FATF will undertake the next review of Pakistan’s Progress in June 2020.

February 20, 2020 (PR No. 258)

Federal Govt and Balochistan Government agreed to resolved their energy issues amicably

Adviser to the Prime Minister on Finance and Revenue Dr.Abdul Hafeez Shaikh chaired the meeting here at the Finance Division to review various energy sector issues that were pending between the Federal Government and the Government of Balochistan for many years.

Balochistan Government was represented by Secretary Energy Department Balochistan, and Federal Government was represented by the Minister for Energy and the Adviser to the PM on Petroleum. There were other members from the Ministry of Inter- Provincial Coordination.

In the meeting various issues regarding the extension of lease of gas fields of Balochistan, rights and share of Government of Balochistan in the new and old oil and gas exploration business, rationalization of gas tariff for the local population, gas allocation to power plants and the creation of training fund for Balochistan were discussed. For creating a training fund, it was decided that the matter shall be resolved within a fortnight.

After discussion on the other issues, the Adviser decided that the representatives from the Government of Balochistan and the relevant Federal Ministers should hold further meetings with representatives of the Law Division among them for expert advice and firm up proposals with consensus that could benefit both the Federal and Provincial Governments without violating the spirit of the18th Constitutional Amendment and the interests of any private party involved in the business. The groups are expected to hold meeting within a month’s time to firm up appropriate proposals for submission before the competent forum for final approval.

February 20, 2020 (PR No. 257)

Delegation of Commonwealth Enterprise called on Adviser to PM on Finance and Revenue

A delegation of Commonwealth Enterprise and Investment Council (CWEIC) led by the Deputy Chairman of the Enterprise Rt Hon Sir Hugo Swire, called on the Adviser to PM on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division.

Head of the delegation briefed the Adviser that Commonwealth Enterprise has a mandate to facilitate trade and investment through 53 member nations of the Commonwealth. Every two years, they host the Commonwealth Business Forum in association with the Host country of CHOGM (Commonwealth Heads of Government Meetings), told the delegation representative. This year the Commonwealth Business Forum 2020 is going to be held in Rwanda and they wish to invite the PM along with the Business delegations to the Forum, added the Deputy Chairman. As far as the working of the CWEIC is concerned, CWEIC highlights the key opportunities in the member countries and arrange small forums around the world to provide access to new markets, said Mr. Swire. The Deputy Chairman specially praised the efforts made by Pakistan to improve its rating on Ease of Doing Business Index and acknowledged the macro-economic stability Pakistan has gradually achieved.

The Adviser informed the delegation that Pakistan is making serious efforts to improve its business environment for foreign investors and it is in search of finding new markets for its exports and the commonwealth countries can become excellent destinations. He specially mentioned the steps taken by the Government for simplification of procedures that can reduce the administrative burden on investors, if they come here with their resources and expertise. In this context, joint efforts can be made to provide opportunities to Pakistan’s local businessmen. The Adviser appreciated the idea of creating a “business hub” and forming coalition among various hubs that can benefit all partners.

The Adviser assured the delegation for his support in their endeavors for forming business alliances and sharing useful experiences among the business groups for prosperity and development of the member states.

February 19, 2020 (PR No. 256)

Meeting of NPMC held under the Chairmanship of the Secretary Finance

The meeting of the National Price Monitoring Committee was held under the chairmanship of the Secretary Finance here at the Finance Division.

Senior representatives of the Provincial Governments, ICT Administration, Pakistan Bureau of Statistics, Ministry of Commerce, Ministry of National Food Security and Research, Utility Stores Corporation, Pakistan Customs and Cabinet Division attended the meeting.

Data on CPI and SPI was presented by the Economic Adviser’s wing at the Finance Division with input from Pakistan Bureau of Statistics. It was noted that inflation has increased around 14.6% in January when compared to same period last year, noteworthy aspect being observed is that during the past five weeks the SPI (Sensitive Price Index) was showing a declining trend. On the week ending on 13th Feb 2020, SPI was -0.38. The prices of 13 items decreased and 19 remained stable in the past week. It was observed that wheat was the cheapest in Punjab and highest in Sindh ( Rs 809 per 20 kg and Rs 1058 respectively).

Secretary Finance, after concluding the discussion on the prices of the essential items and a follow up on the decisions taken in the last meeting, made the following conclusing remarks; he was also joined by Secretary NFS&R;

Prices of essential items are increasing in the markets around the country and causing unrest in the public, but it must also be remembered that after devolution the function of price control falls under the domain of the Provinces. They must accept this responsibility and make efforts to appease the masses.

The local governments should be ready and prepared to take additional measures during Ramazan to save masses from price hike. If any help is required from the Federal Government, the Federal Government shall be ready to facilitate.

Provinces should share information as to which items other than the essential items, they think, add to inflation and how the government can help in coping with the scarcity. They should also share and guide the federal government and other provincial governments that how network of sasta bazaars will help to reduce inflationary pressures on the common man.

Hoarding for profiteering should be checked at every level and every stage and necessary action under the law should be taken against profiteers and hoarders.

The local government heads should ensure display of price lists and its applicability.
Smuggling of essential food items should be dealt with utmost severity.

As far as the Federal Government is concerned, Secretary Finance stated, the issue is being taken with utmost importance as the Prime Minister is particularly interested in reducing the burden on the common man which is increasing due to increase in prices. The PM is personally engaging the provincial Chief Secretaries twice a week to ensure swift action. The PM has also given subsidy to Utility stores Corporation (Rs 15 billion) and there are suggestions to open more of the stores in various parts of the country where they are needed. Federal Government is also taking measures to control smuggling of essential food items. Ministry of NFS&R is also preparing proposals to be approved by ECC that will help in controlling the deficiency of essential items. The Federal Government is doing everything possible in its domain.

The Secretary said that “there will be accountability for all those who are not taking the appropriate action keeping in view the distress the general public is enduring due to increase in the prices, as the Government is mindful of the welfare of the people”.

It was also decided that there will be a follow up meeting in the next week as the PM has special interest in reducing the level of prices of essential items all over the country.

February 18, 2020 (PR No. 255)

Adviser to PM on Finance and Revenue emphasized price stability

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul hafeez Shaikh chaired a high level meeting here at the Finance Division to evaluate the current situation of prices of essential food items in the country.

The Adviser was given a detailed briefing on the prices of essential items, the price trends over the years and the comparative situation of prices in the international markets. The Adviser was also briefed on the measures taken to control the price hike of essential food items and the preparations for the upcoming months including Ramazan.

The Adviser directed the relevant stakeholders to take all requisite measures to ensure that reasonable prices of all essential items are maintained across the country with effective coordination of the provincial governments and the burden on the common man is not enhancd with runaway prices.

February 18, 2020 (PR No. 254)

Minister for Science and Technology met with Adviser to PM on Finance and Revenue

Minister for Science and Technology Fawad Chaudhry called on the Adviser to PM on Finance and Revenue Dr Abdul Hafeez Shaikh here at the Finance Division.

The Minister for Science and Technology discussed with the Adviser details of a proposal they are preparing for the promotion of Research and Development in the country specifically with reference to bio-technology and chemical production the country. The proposal envisages a liaison between the business community, different Universities and research institutions. The Minister briefed the Adviser that the proposal envisages an export value of $1.3 billion worth of chemicals that are used for different industrial purposes.

The Ministry of S&T is working on a proposal to establish Special Economic Zones to promote research in Chemicals and bio-technology, initially in some major cities of the country, said Minister for Science and Technology. The Minister also stated that research and development in the field will not only boost the quality of local production but also has chances to fetch foreign exchange by export. A pilot project shall be started soon, he said

The Adviser appreciated the prospects the project is likely to offer and the role of the Ministry of S&T in bringing in innovative ideas for the promotion of exports and promoting projects that will help in promotion of investment in research with commercial application. He assured the Ministry of S&T of all possible coordination and facilitation.

February 18, 2020 (PR No. 253)

Delegation of Mitsubishi Corporation called on the Adviser to PM on Finance and Revenue

A delegation of Mitsubishi Corporation called on the Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division.

The delegation gave an update of their new LNG Project terminal which is under construction at Port Qasim . The delegation briefed the Adviser on the status of progress on the project so far and the status of Import of LNG.

The adviser appreciated the performance of the Corporation and agreed to facilitate the corporation in coordination with the Ministry of Maritime Affairs and Ministry of Petroleum and other stakeholders to bring in valuable investment in the country.

February 12, 2020 (PR No. 251)

UAE Ambassador called on Adviser to PM on Finance and Revenue

Mr. Hamad Obaid Ibrahim Salim Al-Zaabi, Ambassador of the United Arab Emirates called on the Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division.

Both sides discussed preparations for the upcoming Pak-UAE Joint Ministerial Commission meetings expected to be held by the end of the next month. The Ambassador apprised the Adviser about the visit of potential UAE investors, due in next month to look for opportunities of investment in the SME sector. The Ambassador also briefed the Advisor on the Dubai Expo 2020, where the Pakistan’s presence is expected to boost business and trade. He said that the Pak- UAE JMC and Dubai Expo 2020 are an excellent opportunity for Pakistan and UAE business leaders to interact and start joint ventures. Other bilateral issues were also discussed.

The Adviser appreciated the interest taken by the UAE business community to invest in Pakistan; he said that all possible cooperation shall be provided by the Finance Ministry to facilitate the bilateral trade between the two countries.

February 11, 2020 (PR No. 249)

American Business Council delegation met with Adviser to PM on Finance and Revenue

A delegation of the American Business Council called on Adviser to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh here at the Ministry of Finance.

During the meeting, the Adviser highlighted the government policies and measures aimed at facilitating the business and investment climate in the country with focus on the ease of doing business which had been acknowledged by the World Bank as well. He said that the government would take all possible measures to facilitate the businesses and provide them with a level-playing field as the government believed in investment and export-led growth which was more durable and sustainable.

The delegation lauded the efforts made by the government to promote investment in the country and shared with the Adviser a number of recommendations and proposals related to taxation, sale of IT products, tariff rationalization of imported goods, ports and shipping and registration processes. The Adviser assured them full government support for their business endeavours and said the government would continue to interact with the business community and investors to further streamline the business and investment regime in the country.

February 10, 2020 (PR No. 248)

Adviser to PM on Finance and Revenue chaired the meeting of ECC

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez shaikh chaired the meeting of the Economic Coordination Committee of the Cabinet this afternoon.

ECC considered and approved the Technical Supplementary Grant for release of funds amounting to Rs 3300.00 million during FY 2019-20 in respect of the project tilted “Prime Minister’s special package to implement “Skill for All” strategy as catalyst for TVET sector Development in Pakistan.

ECC also approved the continuation of funding facility to ISGS. It was decided that the loan agreement between ISGS and GHPL be approved for a period of one year. Any extension thereafter be subject to progress on the undertaken projects and as soon as the first project reaches closure, ISGS needs to become financially self-sustaining and after closure of the project it will also put forward a business plan how it will return the loan.

ECC was given a briefing by the Ministry of Industries and Production on the current situation of sugar supply in the country. It was briefed to the ECC that adequate stocks of Sugar are available in the country but prices in both domestic and international market are showing an upward trend. In order to maintain the prices in the domestic market, ECC banned export of sugar.

ECC further directed that in case there is considerable decrease in available stock, ECC would be willing to reconsider the proposal for import of sugar as well as the removal of tariff and taxes on subject import. The members of the ECC were all convinced that there are adequate stocks of sugar available in the country and there is currently no compeling reason to import the commodity in the country. It was briefed to the ECC that there are 1.719 million tons of sugar stocks available with the Mills. ECC also directed Ministry to talk to the provincial governments to control price of the commodity in the country as it is provincial subject.

ECC also approved the request by the Ministry of Law and Justice for a technical supplementary grant of US$ 1 million equivalent to Pak rupees as legal and miscellaneous expenses in the case of Reko-Diq. ECC also directed the Ministry to give a detailed briefing on the details of the case in the next meeting.

February 06, 2020 (PR No. 246)

Adviser to PM on Finance and Revenue chaired a meeting to discuss Power Sector issues

Advisor to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chairs a meeting here at the Finance Division to discuss different issues related to the Power Sector.

In the presence of Minister for Energy, Adviser to PM on Petroleum, Secretary Energy and Secretary Finance, different proposal were discussed that were related to how monthly, quarterly and yearly adjustments should be treated and a uniform tariff could be given to the consumers for a period of 12 to 18 months to save them from the inflationary pressures. Tariff proposals for the industrial sector were also discussed.

Adviser Finance asked the Energy Division to take input from other stakeholders as well to build a final proposal with the objective of saving the energy consumers from inflationary pressures and providing ease by gradual reduction in the prevailing tariffs.

The participants are expected to firm up their proposals further with valuable input from other stakeholders before final approval by the competent forum (ECC).

February 04, 2020 (PR No. 245)

Dr Abdul Hafeez Shaikh has said "Pakistan wants to enhance brotherly relations with Iran"

Adviser to Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh has said Pakistan wants to enhance brotherly relations with Iran and bilateral trade and investment are the potential areas for furthering this cooperation.

He made this statement while talking to Ambassador of Iran to Pakistan Seyed Mohammad Ali Hosseini who called on the Adviser here at the Finance Division on Tuesday. Both the sides discussed various ways and means to enhance mutual cooperation and enhance bilateral trade and investment ties.

The Adviser referred to recent efforts made by Pakistan as well as statements made by Prime Minister Imran Khan for ensuring regional peace by saying that any escalation of tension was harmful for the regional peace and Pakistan would keep playing its role for any possible facilitation to deescalate the situation.

Ambassador of Iran thanked Pakistan for its support and hoped the bilateral relations between the two countries would further grow in diversified fields, only trade, banking and investment.

February 04, 2020 (PR No. 244)

CCoP allowed open auction bidding for 27 state properties

The Cabinet Committee on Privatisation (CCoP) has allowed open auction bidding for 27 land assets owned by federal government entities in pursuance of a federal cabinet decision to dispose of unproductive state lands and assets.

The decision was taken at a meeting of the CCoP held at the Cabinet Block with Adviser to the Prime Minister on Finance & Revenue Dr. Abdul Hafeez Shaikh in the chair.

Earlier, the CCoP discussed the issue in detail and approved the recommendations of the Transaction Committee, Inter-Ministerial Committee and Privatisation Commission Board for an open auction bidding procedure and total reserve price of Rs 6.62 billion for 27 properties belonging to different federal government divisions and entities.

The CCoP was further told by the Privatisation Commission that the bidding process for the 27 properties was likely to be completed by the end of April 2020.

February 04, 2020 (PR No. 243)

Adviser to PM on Finance and Revenue chaired a meeting of ECC

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

ECC considered and approved the grant of amount Rs 153.25million from the budget of the Ministry of Finance, as technical supplementary grant for the Ministry of Interior, to be given through the Office of the Deputy Commissioner of Islamabad, for compensation to the victims of suicidal attack at District courts F-8 Islamabad on 03-3-2014. Finance Division supported the proposal in compliance with the orders of the Honorable Supreme Court of Pakistan.

In order to register Postal Life Insurance as Public Limited Company, ECC approved an amount of Rs 700 million as initial paid up capital. The amount shall be allocated by the Finance Division and transferred to the proposed Postal Life Insurance Company. After the approval Postal Life Insurance shall fall under the regulatory frame work of the Securities and Exchange Commission of Pakistan.

ECC also approved the Creation of Digital Media Wing in the Ministry of Information and Broadcasting. The purpose of the Wing shall be to effectively counter the fake/libelous news and highlight the development agenda of the government. The ECC directed the MoI&B to move ahead for the creation of the wing by using its already available resources.

ECC also approved the amendment in SRO 192(1)/ 2019 dated 11-02-2019 extending exemption from regulatory duty to export oriented units.

ECC gave approval to the transfer of funds amounting to Rs 31.5 million in equivalent foreign exchange from the Ministry of Interior to the Ministry of Defence as Technical Supplementary Grant for the logistic support for the maintenance of Cessna aircrafts.

ECC was attended by Federal Ministers for National Food Security and Research, Railways, Energy, Privatization and other senior officials of the different Ministries.

February 03, 2020 (PR No. 242)

Stabilisation policies, agri sector interventions, monitoring to help ease higher inflation -- Finance Division

Ministry of Finance has said that the outcome of stabilization policies, agriculture sector interventions, rigorous monitoring at federal/provincial levels and favourable weather will bring in better results in easing out inflation and sustain the economy towards growth and productivity in the coming days.

Adverse effects of pre-monsoon rains on wheat crop, disruption of supply chain of essential items due to harsh winters and thick fog, delay in harvest and arrival of crop in the market and lower production of vegetables, including tomato in Sindh, led to a higher food inflation but the change of weather and better supply of potatoes, tomatoes and onions should result in smooth supply and decrease price pressure, says the Finance Division in an official statement on Monday.

The Finance Division noted that another factor contributing to higher inflation was the global price impact due to international commodity prices like Palm oil increased by 43.9%, Soybean oil by 12.8%, Crude oil by 16.6%, etc in December 2019 over December 2018 also pushed up the domestic prices. Downward trajectory in crude oil in the market will result in downward pattern in domestic prices in coming months.

While the factors above are likely to ease the inflation, the government has also taken several relief measures to protect the vulnerable from the price-hike. These measures include provision of subsidy to Utility Stores Corporation on 05 essential items for which Rs. 7 billion has been transferred to Ministry of Industries and Production; Rs. 226.5 billion allocated in the budget, Rs. 141 billion already released so far, for low end consumers using less than 300 units of electricity in a month; PM’s Ehsaas program with doubled social safety net allocation of Rs.190bn from 100bn; out of Rs. 24 billion allocated for gas subsidy, Rs. 12 billion have so far been released; and Rs. 1000 per family given to 5.1 million families as a special transfer in August, 2019.

Similarly, Rs. 5,000 quarterly tranche was paid to 4.3 million poor families in December, 2019; Under Kifalat monthly stipends of Rs. 2,000 per month to 4.5 million families for consumption smoothing starting from 1st February, 2020; 1 million new beneficiaries to be added to Kifalat in the next five months with a monthly transfer of Rs. 2,000; undergraduate scholarships to cover the cost of tuition fee and other expenses at the University for 50,000 needy students; Rs. 750 for boys and Rs. 1,000 for girls quarterly stipends to primary school going children three million children covered; record allocation Rs.152 bn for merged FATA districts; and reduced GST on LPG to 10% from 17%.

The Ministry of Finance said the government had also devised a strategy to control and ease out the impact of inflation through a host of policy measures which included ECC permission for import of 0.3 million tons of wheat to decrease the local wheat price and meet the domestic requirement; Zero borrowing by Govt from SBP in Current FY. Government retired Rs. 837.2 billion (1st July-17th January 2020) compared to borrowing of Rs. 3770.5 billion same period last year; Reduction in fiscal deficit, primary surplus H1FY 20; monetary tightening and demand compression by austerity; complete restriction on supplementary grants; prices monitoring Cell in Ministry of National Food Security & Research to check price hikes of essential food items; network of Sasta Bazaars and Utility Store outlets is being expanded for provision of essential items; cheaper Roti provided with subsidy of Rs.1.5 bn for public tandoors; provincial governments monitoring display of price list and quality of items in open market and Sasta Bazaars; and 10) effective measures being taken by the CCP to control Cartelization and undue Profiteering.

January 29, 2020 (PR No. 240)

Adviser to PM on Finance and Revenue chaired a meeting of ECC

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 today at the Cabinet Division.

ECC considered and approved waiving off all port dues/ charges amounting to Rs 194,951,059 on 31-1-2020 or till the vessels leave the port accruing against Karkey. The said waiver was required as a consequence of the settlement agreement reached between the Government of Pakistan and Karkey.
On the summary moved by the Ministry of Industries and Production for the payment of outstanding liabilities of Pakistan Steel Mills against Sui-Southern Gas Company for the non- payment of Gas bills, ECC approved the release of Rs.350 million for the partial settlement of the SSGC liability.

Establishment of Trust Fund to implement risk sharing facility under 3rd Tranche of US$10 million of credit line of US$140 million obtained from World Bank for Pakistan Mortgage Refinance Company Limited (PMRCL) was also approved. The purpose of the Trust will be to leverage the Trust Funds by issuing guarantees in favor of the mortgagors to cover possible losses from eligible mortgage loans.

Finance Division also sought approval for the demand of Rs 80 million as Technical supplementary grant in the budget of the Finance Division for the Financial Year 2019-20 for providing assistance for families of the government employees who expired during service and provision of Adhoc relief allowance 2019.

ECC also approved the proposal sent by the Ministry of Finance for the issuance of direction of the Federal Government to the State Bank of Pakistan under sub-section 6(A) of the section 17 of the SBP Act 1956 to sell its shares in House Building Finance Company Limited (HBFCL).

ECC approved the grant of Technical Supplementary Grant amounting to Rs.100 million to National Information Technology Board (NITB) under the Ministry of IT & Telecommunication for centralized procurement of ICT infrastructure to ensure e-readiness of Federal Government for the implementation of the E-governance program.

January 20, 2020 (PR No. 239)

ECC allowed import of 0.3 million tonnes of wheat

A meeting of the Economic Coordination Committee of the Cabinet (ECC) chaired by Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh has allowed import of 0.3 million tonnes of wheat to decrease the local wheat price and meet the domestic requirement.

Under the decision, the wheat would be imported by the private sector by withdrawing regulatory duty to the extent of the approved quantity. The ECC further decided that the wheat to be imported under the ECC decision would be allowed in the country until 31st March 2020 to ensure that the local wheat to be available from the start of April was picked up at the right price from the market. The ECC also issued instruction for the immediate release of stocks held by the PASSCO and the provincial departments.

Besides the import of wheat, the ECC approved a proposal by the Ministry of Industries and Production to reduce the GIDC on gas consumed by the fertilizer manufacturers from Rs 405 to Rs 5 per bag so that this benefit could be passed on to the farmers.

ECC also allowed the raising of Rs 200 billion on the request of Ministry of Energy (Power Division) from the Islamic Banks as fresh facility through Power Holding Limited by way of issuance of Pakistan Energy Sukuk-II against assets of the DISCOs/GENCOs as collateral through open competitive bidding to procure financing in a fair and transparent manner. The amount will be utilized for the purpose of the funding the repayment liabilities of the DISCOs.

ECC approved the proposed mechanism by the Ministry of Finance for the grant of Sovereign guarantees. All requests for government guarantees are to be accompanied by request for guarantee by the governing body of PSE’s. Further

  • Every request must be reviewed and endorsed by the concerned Administrative Ministry/Department of the relevant entity.
  • Audited Financial statements of previous year prior to issuance of guarantee is mandatory for evaluation of guarantee request
  • Business plan including an explanation of the business model and financial projections for at least 5 years;
  • A note explaining the following;
    1. Whether its need for guarantee is short term or long term
    2. Business model followed by the entity since inception or over the last 5 years, whichever is less
    3. Financial as well as non-financial performance of the entity since its inception or over the last five years, whichever is less
    4. Request, along with justification, for the type and amount of guarantee needed by the entity and the timelines over which it is required

The Finance Division shall evaluate the request internally and finalize its recommendations with the approval of the Finance Secretary.

ECC also approved the report on proposed exemption of 5% sales tax on cotton seed cake. It was briefed to the ECC that in case the exemption of sales tax on Cotton Seed Cake cannot be introduced during CFY 2019-20, the same can be considered for inclusion in the Finance Bill of 2020-2021.

The approval of Technical Supplementary Grant of Rs. 96.652 million of National Book Foundation in favor of Ministry of Federal Education and Professional Training was also granted by ECC.

Technical Supplementary Grant amounting to Rs 15 million for centralized procurement of ICT infrastructure to ensure e-readiness of Federal Government for implementation of E-Governance program was also approved.

ECC granted approval to the request of the Ministry of Interior for the Technical Supplementary Grant amounting to 458 million for payment of subsistence allowance to Personnel of Civil Armed Forces deployed in UN Peacekeeping Missions.

January 14, 2020 (PR No. 238)

Govt taking steps to address inflation, low domestic productivity -- Adviser to PM on Finance & Revenue

Adviser to Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh has said the government is taking steps to tackle inflation and enhance domestic productivity through greater spending on social safety net, improving cash transfer programme, ensuring greater ease of doing business and providing subsidized loans, electricity and gas to the exporters.

“The government has worked very hard to pull the economy out of the ICU as it was in 2018, and the stage is now set for greater stabilization and enhanced domestic productivity that would help overcome inflation, boost businesses and create more employment opportunities,” he said while talking to Ambassador of France Dr. Marc Barety who called on the Adviser at Finance Division today.

Dr Abdul Hafeez Shaikh said that the government was focusing on revitalising the agriculture sector and several mega projects had been approved for improving irrigation management, watercourses and construction of water storage facilities at the farm level. These projects are also aimed at productivity enhancement of various crops, oilseeds enhancement, cage culture development, shrimp farming cluster development and water conservation in arid areas.

He said the government had doubled the social safety budget from Rs 100 billion to Rs 190 billion while it had also recently revamped its cash transfer programme by replacing nearly 800,000 people with more deserving people. The government had also recently launched a special food package at a cost of Rs 7 billion to provide essential food items at reduced rates through the utility stores to the poor segment of population adversely affected by the food inflation.

On the macro front, he said the government had brought down the current account deficit from 20 billion dollars to 13 billion dollars and it would be further reduced to 8 billion dollars this year. Similarly, exports which had remained stagnant for almost five years had showing an upward trend.

He said the revenue collection had jumped by 16 per cent and foreign direct investment had gone up by 280 per cent growth in the current financial year. Similarly, Pakistan’s exchange rate had begun to stabilize due to enhanced external flows while Pakistan Stock Exchange had been declared by Bloomberg as the best performing market in the world.

France Ambassador to Pakistan Dr. Marc Barety said he was impressed with the good work done by the government in Pakistan to introduce institutional reforms and achieve stability and growth. He said both France and Pakistan enjoyed excellent relationship and hoped this relationship would further deepen in coming days through greater economic collaborations and business partnerships.

January 13, 2020 (PR No. 237)

Fitch Ratings has affirmed Pakistan's sovereign credit rating at B- with a Stable Outlook in its press release dated 13th January, 2020

Fitch takes note of the improved external resilience due to the policy actions taken by the Government. Going forward, Fitch forecasts further narrowing of the current account deficit to 2.1 percent of GDP in FY20 and 1.9 percent in FY21, from 4.9 percent in the last fiscal year. The Rating Agency has also appreciated the adoption of a flexible exchange rate by the State Bank of Pakistan. According to Fitch, with the reform agenda on track as evident from the successful review of the arrangement with the IMF, the Government is consolidating public finances though stronger revenue growth, broadening of tax base and increased documentation of the economy.

Fitch has also acknowledged improved fiscal discipline, ensured by the recently introduced Public Financial Management Act and the steps taken by the Government to manage domestic debt risks following cessation of borrowing from the State Bank of Pakistan. The country’s progress on business reforms, reflected in the country's move from 136th to 108th in the World Bank's latest Ease of Doing Business survey is also noted as a significant achievement.

Going forward, Fitch Ratings expects continuation of policies to further ease external account vulnerabilities, strengthening of fiscal consolidation and further improvement in business environment as key drivers for enhanced economic stability.

January 13, 2020 (PR No. 236)

New measures to help achieve $24 billion remittances target for FY2020

The growth in foreign remittances that soared to $ 11.4 billion during the July-December period of FY 2020 is likely to continue for the rest of the year due to a host government measures that may help achieve the target of $ 24 billion set for the financial year 2020.

“Due to this increasing trend in remittances, the target of $ 24.0 billion at the end of FY2020 is likely to be achieved as the data of last five years suggests that the workers remitted more in the last six months as compared to the first six months of the fiscal year,” said a statement issued by the Ministry of Finance.

The Ministry said that seasonal effect was also a leading factor in boosting remittances and it was expected that with the start of Ramadan and the following Eid, the flow of remittances would increase as the workers generally sent more money during the holy events and activities.

Giving a break-up of the remittances received during the Jul-Dec 2019, the statement said that the remittances reached $ 11.394 billion as compared to $ 11.030 billion in the corresponding period last year, showing a growth of 3.3 percent. Overseas Pakistani workers remitted $ 2.097 billion in December 2019 as compared to $ 1.819 billion during November 2019.

On month-to-month basis, the remittances increased by $277.56 million in December, with a growth of 15.25per cent, the highest recorded remittances in a month since May 2019. Similarly, on year-to-year basis, remittances witnessed a growth of 20 per cent in December 2019 as compared to 0.14 per cent in the corresponding period last year. The share of remittances from Saudi Arabia was at 23.0 per cent ($ 2618.0 mn), U.A.E 20.6 percent ($ 2349.3mn), USA 16.6 per cent ($ 1889.8 mn), U.K 15.4 ($ 1753.0 mn), other GCC countries 9.6 per cent ($ 1089.20 mn), Malaysia 7.0 per cent ($ 798.0 mn), EU 3.0 per cent ($ 339.2 mn) and other countries 4.8 per cent.

The statement by the Ministry of Finance further said that increased efforts by the Pakistan Remittance Initiative (PRI) helped to attract higher remittances from the Pakistani diaspora through Enhancing outreach, Reimbursement of T.T. Charges Scheme (Free-send Model) and Improvements in Payment System Infrastructure etc. Similarly, visa fee reduction from the Kingdom of Saudi Arabia is likely to boost up the inflows while export of manpower had also been increased from 382,000 to 625,000 during January-December 2019, with an increase of 243,000 as compared to the corresponding period last years.

The statement further said that the government had improved its diplomatic relations with the Gulf States which had helped restored the confidence of foreign employers in Pakistani workforce. Similarly, reimbursement of T.T. Charges Scheme had also been revised in December 2019. Accordingly, the amount of home remittance transaction equal to and above USD 100/- but less than USD 200/- (or equivalent in other currencies) would be reimbursed at SAR 10/ while the amount of home remittance transaction equal to and above USD 200/- (or equivalent in other currencies) would continue to be reimbursed at SAR 20/-.

In order to further encourage promotion of home remittances through formal channels, the Government of Pakistan had re-launched the performance based scheme effective from January 01, 2020 in which, Rs. 1 per each incremental USD mobilized over 15% growth in remittances in calendar year 2020 compared with the levels achieved in calendar year 2019.

January 09, 2020 (PR No. 235)

Seats for two federal colleges approved, others being expedited

Ministry of Finance has described as factually incorrect a news report published in a section of the press claiming that the Ministry of Finance had been using bureaucratic procedures to delay the sanction of 64 posts of teaching and non-teaching staff for federal colleges despite their approval and recommendation by the Planning Commission.

In a statement, the Finance Division has clarified that the case for creation of 64 posts for IMCG I-8/3, IMCG I-14/3, was moved to Finance Division without complete information and requisite documentation. Hence the matter was referred back to Ministry of Federal Education and Professional Training for the needful.

The statement further said that requisite input from the relevant ministry had been received and the case was being processed in an expeditious manner. The statement pointed out that similar posts for educational institutions in Bhara Kahu and Sihala areas of Islamabad had already been approved by the Finance Division and the same had been acknowledged and mentioned in the news report, belying the impression of red-tape created by the news report in the case of other colleges.

January 09, 2020 (PR No. 234)

Economy moving progressively on adjustment, stabilisation path

The Ministry of Finance has said that the government’s extensive measures have helped the economy move progressively along the adjustment path and stabilization process and economic recovery is expected towards the end of FY2020.

“The government is focused on bringing improvement in the real sector growth through inclusive growth in agriculture, industrial and services sectors,” said a statement by the Finance Division in response to certain news reports carried in a section of the regarding downward revision of growth by the World Bank.

The government is cognizant of challenges and stringently focused on resolving them particularly, reducing inflation, creating job opportunities and achieving high growth rate. Keeping in view the positive developments on major economic indicators, we expect that the economy will likely to achieve better growth prospects as against the projections of the World Bank.

The World Bank in its report ‘2020 Global Economic Prospects’ had forecasted Pakistan`s current year growth rate at 2.4% before touching 3 % next fiscal year and 3.9 % in FY2022. The bank’s report had also mentioned that the growth had decelerated an estimated 3.3 % in FY2018-19, reflecting a broad-based weakening in domestic demand. In addition, the report had described that significant depreciation of the Pakistani rupee resulted in inflationary pressures, monetary policy tightening restricted access to credit, curtailing public investment to deal with large twin deficits and budget deficit rose more sharply than expected.

It may be pointed out that during FY2019, the slowdown in economy was largely attributed to various policy measures to manage the twin deficit crisis. Consequently, these measures helped to contain demand pressures and contributed to import compression. However, the outcomes of these measures were realized on the industrial sector. Particularly LSM sector witnessed a negative growth. At the same time, high input costs along with water shortages weakened agriculture sector’s output and hence, the drag in the commodity-producing segments spilled over to the services sector as well. Resultantly, the real GDP growth recorded at 3.3 percent.

At the start of current fiscal year, with government’s extensive measures, Pakistan’s economy is now moving progressively along the adjustment path and stabilization process; however towards the end of FY2020, economic recovery is expected. In this regard, Government is focused on bringing improvement in the real sector growth through inclusive growth in agriculture, industrial and services sectors.

For growth in agriculture sector, the target production of wheat is 27 million tons given by FCA in last meeting held in October. In addition to uplift agriculture sector “National Agriculture Emergency Programme” in coordination with all provinces has been introduced and approved 13 mega projects at the cost of Rs 287 billion. Agriculture credit disbursement target for CFY20 has been set at Rs.1,350 billion. Agriculture credit disbursement increased by 20% to Rs 482 bn during Jul-Nov, FY2020 against Rs.402 bn last year.

To boost industrial sector, the government is providing a series of subsidies and incentives to industrial sector. These include subsidies to industry for electricity and gas, export development package and continue to provide Long-Term Trade Financing (LTFF) and Export-Refinancing Scheme (ERS) at subsidized rate.

Similarly, PSDP release process is simplified and up to 3rd January, 2020 Rs.301.4bn (Rs.225.4 bn) released to encourage construction related industries especially cement & steel. In addition, Cement dispatches growth of 6.55% (24.8 mn) during July-Dec, FY2020 against 23.2 mn in the last year. This development would likely stimulate the growth in LSM in coming months.

On fiscal side, to control expenditures, government is following austerity measures with complete restriction on supplementary grants. For export promotion several initiatives have been announced such as support duty structure on raw materials and intermediate goods, improve mechanism for tax refunds, provide electricity and gas at competitive cost, and make Pakistan part of the global value chain.

Government’s various measures to stabilize the economy has already started to reap benefits in the form of sustained adjustment in current account deficit (CAD) and continued fiscal prudence. A brief review indicates that CAD reduced by 72.9% during July-November FY2020, Fiscal deficit contained at 1.6% of GDP (Rs 686 bn) during Jul-Nov FY2020 ,Primary balance posted surplus of Rs 117 bn during Jul-Nov, FY2020 (0.3 percent of GDP), significant rise in FBR tax revenues to Rs.2085.2 bn (16.4 %) during July-December, FY2020, improved ranking in ease of doing business, ranked among the world’s top 10 best business climate improver and ‘Stable’’ credit outlook to B3 from ‘Negative’ by Moody’s is an affirmation of Government’s success in stabilizing the economy and laying a foundation for robust growth.

January 08, 2020 (PR No. 233)

CCOE urged plan to improve energy supply, reduce shortage

The Cabinet Committee on Energy (CCoE) in its meeting held on Wednesday with Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh in the chair has sought a detailed plan from the Ministry of Energy to overcome the shortage of energy and improve gas supplies throughout the year.

The instruction was given to the Ministry of Energy after it briefed the Cabinet Committee on Energy on the current situation of demand and supply of gas/RLNG, natural gas allocation and management, average gas supplies, winter load management, indigenous gas production, supplies and consumption in different regions and LNG requirement by the SNGPL/SSGC.

Earlier, the CCoE was told that due to lack of gas exploration during the last 10 years, production of gas had declined by 7 per cent while demand had risen by 5 per cent annually which had resulted in a heavy gas shortfall which stood at nearly 270mmcfd in December 2019. One of the major reasons for this upsurge is the consumption of gas in winter season, almost double than the summer, by the domestic sector which prefers to use heavily-subsidized gas as compared to other energy sources, the meeting was told.

The CCoE was further told that work to add 70mmcfd in SSGC system and take LNG supplies for SNGPL up to 1300mmcfd had already started but its implementation was hampered by grant of Right of Ways from the Government of Sindh which had granted only one so far and two more were still awaited since last summer. With these measures, nearly 70mmcfd gas is likely to be added to SSGC by end January.

The CCoE was further told that in view of 2020-21 projections showing a shortfall of 477mmcfd, the government had decided to build additional terminals and five new private terminals had been awarded in Nov 2019, while process for a dedicated pipeline of 1.2 BCFD+ required to carry imported LNG from these terminals to north, would also begin soon.

The CCoE noted that there was a need to work on contingency plans for 2020-21 to overcome the gas shortage and improve its supplies by using energy produced through gas and electricity as a whole to provide more options to energy consumers and bring in more efficiency in the system.

The CCoE also asked the Ministry of Energy to brief it in the next meeting on the current situation in power sector so that the issues and problems in both the gas and power sectors could be properly analyzed and contextualised uniformly to come up with realistic and more efficient solutions to bridge the gap between the demand and supply in the energy sector.

January 08, 2020 (PR No. 233)

Adviser to PM on Finance and Revenue chaired a meeting of ECC

Adviser to the Prime Minister on Finance, Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee of the Cabinet here at the Cabinet Division.

ECC approved the Technical Supplementary Grant of Rs 1.00 billion under demand No.04-Cabinet Division for establishment of Pakistan Tourism Development Endowment Fund under Public account. The Chair directed Pakistan Tourism Development Corporation to come up with their tourism development and soft image promotion plan in the next meeting.

ECC also granted approval of allocation of Gas from PGNiG’s RIZQ Gas Field to M/S SSGCL. It was briefed to the ECC that currently 2 wells namely Rizq-1 and Rizq -2 are producing 16 MMFCD gas from Rizq gas field, which are allocated to M/s SSGCL, whereas Rizq -3 which is under drilling, is expected to add another 9 to 10 MMCFD gas to the existing production. Upon completion of this well, the cumulative gas production from this gas field is expected to raise upto 25 MMCFD. The price of the gas shall be according to the applicable Petroleum Policy.

ECC also gave approval for the constitution of the price Negotiation Committee (PNC) for TAPI(Turkmenistan-Afghanistan-Pakistan-India) Gas pipeline project. The PNC shall negotiate the price with Turkmen gas. The Committee shall consist of the following members; Secretary, Ministry of Energy (Petroleum Division) as chairman. Secretary Finance or his nominee, Joint Secretary, Ministry of Energy (Power Division), Director General (Gas)/ Director (Gas) and Managing Director, SSGCL as members.

On the Demand moved by the Ministry of Industries and Production for Rs 3.02 billion for the payment of outstanding dues of SSGC Private Limited by Pakistan Steel Mills on account of gas bills, the ECC directed to constitute a three-member Committee under the Chairmanship of Secretary Finance to find out a feasible solution for the issue so that the already allocated budget may not be exceeded and the liabilities of both SSGC and PSM are duly settled.

ECC directed Ministry of Finance to explore the possibilities for improving the liquidity position of Pakistan State Oil as exchange losses of around Rs 28 billion have incurred on FE-25 loans by PSO. The loans were acquired under the instructions of Ministry of Finance for financing of import operations of PSO. Finance Ministry assured the ECC of utilization of possible all funding options in the ongoing financial year and any deficiency in the funds shall be entertained in the upcoming budget.

ECC granted extension of Government of Pakistan guarantee against credit facility of National Bank of Pakistan amounting to PKR 5 billion in favor of Utility Stores Corporation of Pakistan.

On the request of the Ministry of Water Resources ECC granted approval to WAPDA to raise loan for the settlement of the Financial Facility amounting to PKR to PKR 17.500 billion with one-year tenure and GoP guarantee. Clearance under Prudential Regulations R-4(clause 1a and 2) from the State Bank of Pakistan to disburse the facility initially against a letter of comfort was also granted.

January 06, 2020 (PR No. 232)

Adviser to PM on Finance and Revenue chaired a meeting of ECC

A meeting of the Economic Coordination Committee (ECC) of the Cabinet chaired by Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh has recommended for submission to the federal Cabinet a set of amendments proposed by the Ministry of Energy to the Regulation of Generation, Transmission and Distribution of Electronic Power Act 1997.

The ECC was told that the proposed amendments to the Regulation of Generation, Transmission and Distribution of Electronic Power Act 1997 were aimed at bringing more clarity and precision in the market operation, uniform tariff, timely submissions and determination of quarterly and annual tariffs.

The ECC discussed the proposed draft amendments in detail and recommended their submission to the cabinet with a slight modification in the text to make it more clear as per input from some members of the ECC.

After the ECC’s go-ahead, the proposed Amendments would be taken up by the federal Cabinet and later submitted to the National Assembly Secretariat for further discussion by the NA Standing Committee and other relevant stakeholders, including Nepra, before being put to vote by the House.

January 06, 2020 (PR No. 231)

ECNEC approved Southern Punjab Poverty Alleviation Project

Adviser to the Prime Minister on Revenue and Finance Dr. Abdul Hafeez Shaikh chaired the meeting of Executive committee of the National Economic Council (ECNEC) here at the Cabinet Division. ECNEC considered and approved seven projects put forth by Ministry of Planning, Development and Special Initiatives.

ECNEC considered and approved the Southern Punjab Poverty Alleviation Project (SPPAP)-IFAD assisted, Revised-III at the total cost of Rs15.52 billion with Rs 7.5 billion as the FEC. Government of Punjab and the International Fund for Agricultural Development are the financers of the project and the aim of the project is to contribute to reduction of poverty in the Southern Punjab Region through improving the living standards of the people, boosting agricultural production and provision of infrastructure such as water supply, irrigation, access roads, sanitation and drainage facilities to the population. The project is expected to be complete by 2023. It was briefed to the ECNEC that the main cause of the revision in the cost of the project was the change in the exchange rate.

ECNEC also gave approval to “Higher Education Development in Pakistan” (HEDP) Islamabad, at the total cost of Rs12.08 billion with FEC of Rs 7.72 billion to be provided by World Bank IDA Financing. The project has five components; Nurturing academic excellence in strategic sectors, supporting decentralized Higher Education Institutes for improved teaching and learning, equipping students and Higher Education Institutions with modern technology, Higher Education Management Information System and Data driven services and technical assistance. The project is expected to raise the overall quality of Higher Education in the country with the use of IT services.

The “Pakistan Multi Mission Communication satellite system(PakSat-MMI) project” for the establishment of the Geostationary Communication Satellite and its ground control stations located inside Pakistan, cohosted with the PakSat-IR ground control equipment also got approval by ECNEC at the total cost of Rs 39.7 billion. 15% of the cost of the project shall be finance through Federal PSDP and 85% shall be Chinese Concessional Loan. The project aims to help in increasing mobile density, tele density, broadband internet density, employment generation and quick to establish means of communication over a large geographical area stretching beyond national borders. The project shall complete in 44 months.

ECNEC approved the Terbela 4th Extension Hydropower project Revised PC I, at the total cost of Rs122.9 billion. The objective of the project is the expansion of the present capacity of Terbela Dam Hydro Power Project from 3478 MW to 4888 MW (addition of 1410 MW) by installation of three units of 470 MW on the existing irrigation tunnel 4. World Bank IBRD/IDA shall be providing 90% of the financing of the project (US$692 million) and 10% of the financing shall be done by WAPDA’s own resources. The Project is located at Swabi and Haripur Districts of Khyber Pakhtunkhwa.

The renewable Energy Development Sector Investment Program (3rd Revised) also got approval by ECNEC at the total cost of Rs12.8 billion with Rs 8.84 billion as FEC. The project shall be sponsored by the Government of Punjab with the financial assistance of Asian Development Bank (ADB). The main objective of the REDSIP project is construction of hydel projects i.e Marala (7.64 MW), Chianwali (5.38 MW), Deg-Outfall (4.04 MW) and Pakpattan (2.82 MW) at Canal Falls of Punjab. The project also envisaged capacity building of Energy Department, Punjab and PCII for additional feasibility studies/ construction of hydropower stations in Punjab.

The “Evacuation of Power from Wind power projects at Jhimpir and Gharo Wind Clusters” Revised PC-I at the total cost of Rs13.40 billion was also approved by ECNEC. The National Transmission & Despatch Company Ltd. (NTDC) will be the Executing Agency. The main objective of the project is evacuation of 1256 MW power from the Wind Power Plants (WPPs)installed at Jhimpir and Gharo wind clusters for supply of power to respective load centers of DISCO i.e HESCO through transmission network of NTDC system. The Project shall be financed by KfW (27 million Euros) and NTDC’s own resources. The expected time for the completion of the project is 33 months.

In today’s meeting the Report of the Committee constituted by ECNEC (on its meeting of 15-7-2019) for the determination of tariff for PC I based public Sector Power Projects was also presented. According to the submission of the Report it was decided that “in future all Power Projects (irrespective of fuel technology) funded through PSDP should comply with NEPRA tariff regime by applying to NEPRA for tariff determination at feasibility, EPC and COD stages, including Balakot Hydropower project. Public sector Projects must have assured funding”.

The Chair directed the Ministry of Planning to inform the forum on the status of all PSDP funded projects in the next meeting.

January 02, 2020 (PR No. 230)

Adviser to PM on Finance and Revenue chaired the Inter-Ministerial meeting

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the Inter-Ministerial meeting regarding the issue of pending payments by Etisalat. Minister for IT Khalid Maqbool Siddiqui was also present in the meeting.

In the presence of all the stakeholders i.e Secretary IT, Secretary Privatization Commission and Secretary Finance, pending matters regarding the final settlement were discussed in detail. The Adviser to the PM on Finance said that “we want to move beyond the status quo maintained on the issue for over a decade and bring the matter to a final settlement beneficial for our country and our long-term business interests”.

The Adviser directed the participants to come up with the final proposal for the resolution of the pending payments before the end of this month.

January 01, 2020 (PR No. 229)

Adviser to PM on Finance and Revenue urged FBR to strive for optimal resource mobilisation

Adviser to Prime Minister on Finance & Revenue Dr. Abdul Hafeez Shaikh has asked Federal Board of Revenue (FBR) to aggressively follow up on its agreement with the traders to expand the tax base, work optimally to enrol nearly 20,000 points of sales in the country, grant timely and full payment of tax refunds and draw up and pursue a futuristic work-plan using modern communication tools to achieve organisational targets and goals in an ongoing manner.  

“An efficient and robust communication with the public and stakeholders should be at the centre of every activity undertaken by FBR to harness public support for its efforts for broadening the tax base and promoting a tax-compliant culture in the country,” he said during a visit to FBR House where he was given a detailed presentation by the Chairman FBR Mr. Shabbar Zaidi and his team on the results of various revenue collection initiatives and reforms, key challenges, public facilitation and confidence-building measures to boost the revenue growth and resource mobilisation. Secretary Finance Naveed Kamran Baloch, Special Secretary Finance Omar Hamid Khan and Members of FBR were also present.

Earlier, Chairman FBR told the Adviser that FBR had registered 16.3 per cent revenue growth by collecting Rs 2,083.2 billion as per provisional figures for the period between July-December 2019, netting Rs 292.3 billion more than the revenue collected during the corresponding period last year. Similarly, he said that more than 2.168 million tax returns had been received by FBR by 31st of December 2019 and at least 600,000 more people were likely submit their returns in the time extended till end January 2020.

The Chairman also dilated on the domestic tax collection which had picked significantly showing 21 per cent growth in domestic income tax, 34 per cent growth in domestic sales tax and 25.6 per cent increase in domestic federal excise duty, raising the share of domestic revenue to Rs 1,172 billion in the overall tax collection so far as against Rs 934.5 billion in the corresponding period last year.

Mr. Shabbar Zaidi said the FBR had doubled its focus on the taxpayer facilitation and automation of processes and now all steps of interaction of taxpayers with the department, including registration, issuance of certificates, returning filing, audit and monitoring were fully automated. He said FBR had given away tax refunds worth Rs 100 billion to the taxpayers so far this year as against Rs 36 billion refunds given last year.  

The Adviser lauded the Chairman FBR and his team for a commendable performance and asked them to redouble their efforts for an optimal revenue collection in view of the current economic condition of the country where the people were looking more towards FBR because each dollar not earned by the revenue authority would have to be borrowed from somewhere else, affecting the future choices of the country.

He also advised the FBR management to follow an integrated media and communication plan using all modern tools of information and expertise of top-level service and content providers in the market to communicate with the public and share with them on a consistent basis the results of efforts on revenue collection and tax facilitation, particularly its agreement with the traders and the follow-up work afterwards, enrolment of 20,000 new POS (point of sales), progress on release of tax refunds, information about changes in Form H and the result of other reforms undertaken so far by the FBR. “These areas should be the focus of the FBR team in the new year,” emphasised the Adviser.

Dr Abdul Hafeez Shaikh said all his support was available to the FBR team for their honest work and he hoped that the revenue collection arm of the government would not disappoint the nation and work harder to fulfil the expectations of the Prime Minister.

The Chairman FBR said that he had appointed five new complaint commissioners for the redress of complaints and by March many of the pending cases would be resolved. He also committed to provide results of their sector-wise collection and progress on new initiatives and implementation of reforms to the Adviser in the next week.
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