Govt to sign new agreement with IPP’s: Hafeez Shaikh

Minister for Finance Abdul Hafeez Shaikh said that Pakistan’s macroeconomic indicators are posting positive growth, which shows that the country's economy is on an upward trajectory. He also said that the government is going to sign a new agreement with 53 IPPs.

Talking to a private channel, the Finance Minister said that the government had doubled the budget for the welfare of the general public. Rs 192 billion was set aside in the budget for the welfare of the people. The volume of subsidies is more than a thousand billion rupees. The target of subsidies is the general public. He informed that under the Ehsaas program, 15 million families were given money in a transparent manner.

Abdul Hafeez Sheikh said that the amount under the Ehsaas program will be given to 7 million people every third month. Rs 152 billion has been set aside for the former FATA areas.

Talking on rising imports, Shaikh said that due to the undervalued dollar, imports increased and deficit of $35-40 billion created a crisis. When the government took over, there was $2 billion in the national exchequer.

On issues revolving the power sector, he said that "there is a lot of focus on the power sector." Many steps are being taken for the power sector. The impact of the measures on the energy sector will come in 9 to 12 months.

“In the past, energy agreements were made in dollars. A new agreement is going to be signed with IPPs. The new agreement of IPPs will be approved by the cabinet in 10 days. The new agreement of IPPs will benefit Rs 800 billion,” said Shaikh.

The federal finance minister said that the new agreement of IPPs would provide benefit to the tune of Rs 800 billion. IPPs are going to be given Rs 450 billion in past bills. Rs 450 billion will be given to IPPs in two installments. 40% of the amount will be given to IPPs immediately. The remaining 60% will be given to IPPs in August.

The work of collection of distribution is being given to the private sector, he informed .

Abdul Hafeez Sheikh said that the distribution companies would be improved with the help of the private sector. In 2013, the fixed payment was Rs 185 billion. In 2018, the fixed payment was Rs 468 billion. In 2023, fixed payments to IPPs will reach Rs 1,500 billion.

In response to another question, he said that the increase in commodity prices was due to correcting the policies of the past. Wheat is being imported. The rise in commodity prices depends on external factors, he said.

Regarding agricultural production, the federal finance minister said that the past governments did not pay attention to increase agricultural production. Shaikh informed Consumption of wheat is 29 million tonnes while production is 27 million tonnes.

He said that the incumbent government is not borrowing from the SBP. The government is not taking supplementary grants. He said that the government is subsidizing 72 percent of electricity consumption. The government is subsidizing 92pc of gas consumption.

In response to another question, he said that the government is accused of borrowing more. When the government took over, the total debt was Rs 25,000 billion. Our government borrowed Rs 12,000 billion, out of Rs 12,000 billion, Rs 6,000 billion was paid in past interest, whereas debt was increased by Rs 3,000 billion due to rising dollar.