Finance Minister Dr Abdul Hafeez Shaikh has reportedly admitted that the government has not been able to achieve desired results in the power sector reforms, it is learnt. Sources said during a briefing to parliamentarians on economy, at the Ministry of Finance on Thursday, Hafeez Sheikh was quoted as saying that power sector and other State Owned Enterprises have been posing threat to the economy.
The minister said that the government would also take into confidence All Pakistan Textile Mills Association (Aptma) over the gas load shedding in the country. Hafeez also complained that Railways and PIA have been demanding cash support which the government was not able to provide owing to fiscal constraints.
The minister also informed the parliamentarians of the government's achievements as well as the problems faced during the last four years. According to him three factors have been the problematic - floods, increase in oil prices at the international level, and security situation. The minister said the economy suffered $10 billion loss in the first flood and the problem was compounded on fiscal side. Despite all these problems, he said the tax revenue increased by 17 percent during the last six months on the back of measures taken in March 2011 by withdrawing exemption enjoyed by various sectors. Export and remittances growth was very encouraging. Foreign exchange reserves touched the highest figure in the history of Pakistan during last four years, he added.
The minister said issues of power and gas sector, PIA, Railways, and Steel Mills have been major challenges but the Cabinet Committee on Restructuring (CCoR) has been working to revamp the bleeding enterprises. He said these issues are overshadowing the performance of the government. Pakistan Steel Mills, he said was contributing only 14 per cent in terms of steel production in the country but has been major source of criticism for the government.
About Railways, he said the government has created a consortium of banks to provide Rs 6 billion bailout package to it and is paying the salaries and pension of Railways in service and retired employees. He said Railways is a public sector entity and should be responsible for payment of salaries and pension from its own revenue but deplored that the government was paying for its electricity bills as well. The minister said inflation has come down to single digit.
The minister was hopeful that the government would receive $2.5 billion in foreign exchange in the coming months. These included from Etisalat's pending dues, Coalition Support Fund from the US and Auction of 3G spectrum licence. The minister also said the government must be credited for some of the outstanding measures taken for the improvement of the poor, such as Balochistan Package, funding to the Gilgit Baltistan province and AJK, as well as providing financial support to the poor through Benazir Income Support Programme. He said about 6 million poor families are getting financial help from BISP.
As the gas has not been provided to the fertiliser plants, the government has decided to import 1.2 million tons of fertilisers so that poor farmers may not be affected. The government is providing a subsidy of Rs 40 to Rs 50 billion on the prices of fertiliser to farmers, the minister added. The Federal Board of Revenue Chairman informed the parliamentarian about the significant achievements in tax collection. He said we have collected Rs 840 billion in last six months by withdrawing tax exemptions in many sectors.
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