Govt Announces Exporters Package to Promote Exports & Increase Jobs

The government has decided to announce a Rs. 200 billion package for exporters to promote exports, increase production and job opportunities in the country, Advisor to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh said on Monday.

Addressing a press conference, the advisor said that the State Bank of Pakistan had also decided to increase loans for the exporters by Rs. 100 billion.

The government will bear the cost of debt servicing to make the country’s exports competitive and earn more revenue.

Hafeez Shaikh said that the government has also decided to cancel the Rs. 30 billion Sales Tax Refund Bond and payment of Rs. 30 billion will be made to the exporters in cash.

Rs. 30 Billion Subsidy for Naya Pakistan Housing Scheme

Speaking at a news conference along with Minister for Economic Affairs Division (EAD) Hammad Azhar, Chairman Federal Board of Revenue (FBR) Shabbar Zaidi, Special Assistant to Prime Minister on Information Firdous Ashiq Awan, secretary finance and special secretary finance, Shaikh said that a Rs. 30 billion additional amount has been allocated as subsidy to pay the interest of loans for the construction of 300 residential units under Naya Pakistan Housing Scheme for the poor.

He added that the stakeholders involved in the construction sector will also be given special tax concessions.

Circular Debt

Hafeez Shaikh informed that the government had also decided to allocate additional Rs. 250 billion to resolve the problem of circular debts in the country’s power sector. The advisor said that the International Monetary Fund (IMF) has softened its stance on sovereign guarantees and allowed the government to take a loan and make payments to the electricity producers on account of circular debt.

There was a restriction on Pakistan over the issuance of sovereign guarantees over Rs. 1.6 trillion and the IMF has relaxed this condition, added the advisor.

”Economy is on track for improvement”

He said that after four months of stabilization, the economy is set on track for improvement and the government’s priority is now to move the economy on a fast track for employment generation. He was confident that the growth target for the current fiscal year can be surpassed quite easily.

He said that talks with the IMF are a continuous process and so far the Fund is satisfied on the four-month performance of the government that led to a reduction in current account deficit and fiscal deficit, and an increase in exports and foreign exchange reserves by $1.2 billion from July 2019 onwards.

Replying to a question, he said that NFC payments are being made; however, discussions with provinces are in progress to decide how to make an adjustment in NFC after the merger of erstwhile FATA into Khyber Pakhtunkhwa.

He added that the government has allocated a record Rs. 152 billion for the development of erstwhile FATA during the current fiscal year.

On a question regarding the discount rate, the adviser said that the determination of the discount rate is the job of the SBP’s monitory policy committee and that the government has given full independence to the central bank in this regard.

The adviser said that the government had decided not to borrow money from the SBP due to which Pakistan did not print even a single rupee during the last four months.

Shaikh said that the government reached a deal with traders and gave them some relaxations but it did not compromise on CNIC (computerized national identity card) condition.

To a query, he said the previous government wasted US$ 20 to 25 billion only to artificially maintain the exchange rate of Pakistani rupee against the US dollar.

He claimed that during the last four months, the petrol price has not increased despite the fact that its price in the international level increased.