President International Memon Organization and former chairman Rice Exporters Association of Pakistan (REAP) Abdul Rahim Janoo has urged the federal government for a minimum 30 percent LC margins for necessities and 100 percent for luxurious items. In a letter to Prime Minister Imran Khan, he has suggested a number of measures to reduce the pressure on external account, which has forced Pakistan to join another IMF programme.
According to proposal, to cope with prevailing challenges being faced by the government, he has suggested that exports should be linked with our imports and export processes should be sold to importers at slightly higher rate than inter bank rate to discourage the imports and facilitate the exporters.
Attractive home remittances scheme should be announced for overseas Pakistanis to encourage them to send more foreign exchange in the country. The higher inflows of home remittance will help to build the country's foreign exchange reserves and finance the external account, Janoo added.
He suggested that instead of payments in Pak Rupee, commercial banks should issues a special voucher or bond to the beneficiary of home remittances and exporters. The voucher should be tradable in the market particularly in stock exchange at higher rates and importer intending to import can buy those vouchers to open LCs or clear their import payments.
Minimum rate difference between inter bank rate and voucher rate should be fixed at least Rs 3 per dollar as an incentive for the receiver of remittance via bank to discourage Hundi/Hawala system. With this scheme, the government can reduce the burden of foreign exchange for import bills, he proposed.
Imports should be allowed on Letter of Credits (LCs) only and all other means of payment, i.e, DP/CAD/DA should be banned for imports. In addition, minimum LC margins for necessities should be fixed at 30 percent and 100 percent for luxurious items.
To increase the productivity of federal, provincial and semi-government employees, private sectors, industries, private offices, there should be a policy to provide them free lunch in their offices, as today average food cost is also affecting these sectors very much.
This will also save time as well as it will support them financially and working time will be increased for better results and ease their financial burden, Janoo said.