Finance Minister Ishaq Dar has stated the government has not accepted the International Monetary Fund (IMF) condition of currency devaluation. Speaking at a news conference on Saturday, he said that rupee value against other currencies would have been much lower if IMF condition in terms of exchange rate was accepted. The Finance Minister categorically denied that economic decisions were being taken under the IMF pressure or influence. He said that power sector distribution companies are being privatised due to their high losses of around 19 percent.
Dar said the power sector needs to improve its recoveries. He said that the country received $8.98 billion during the first six months of the current fiscal year against $7.79 billion the year before, which reflects a 15.26 percent growth. Trade deficit has slightly narrowed due to higher exports. The Finance Minister said that some additional expenditure is expected on account of Internally Displaced Persons (IDPs); and he promised to make this public as and when allocations are made.
He said that annual fiscal deficit target of 4.9 percent may face some slippages and added that a 2.3 percent fiscal deficit was achieved during the first six months against an annual target of 4.9 percent. Dar said the National Tax Numbers (NTNs) of individual taxpayers would be replaced with National Identity Cards (NICs) from July 2015 and it would not have any impact on tax to GDP ratio. He said that the government has also decided to reduce the export refinance rate to 6 percent from existing 7.5 percent due to a 1.5 percent decline in policy discount rate and the rate of long-term finance facility to 7.5 percent from 9 percent.
The Finance Minister said that Federal Board of Revenue (FBR) has suffered a loss of Rs 68 billion on account of revenue collection due to decline in petroleum prices and GST rate was increased by 5 percent to make up Rs 16 billion. The government has decided to make another increase of 5 percent in GST on petroleum products to recover Rs 12 billion revenue loss.
Dar revealed that foreign exchange reserves soared to $15.067 billion as on January 28 after a net increase of $1 billion over the same period of last year and held Pakistan Tehreek-e-Insaf's sit-ins responsible for a delay in the transaction of OGDCL. Otherwise, the foreign exchange reserves would have been well over $16 billion, he claimed. He said that he has suggested to the Prime Minister to convene an All-Party Conference (APC) on economy to develop a long-term road map. He deplored the PTI's accusation that the government minted Rs 300 billion by not passing on the full impact of reduction in petroleum prices in the global market to consumers. "I don't know who is misguiding PTI chief," he said urging, him not do politics on economy.
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