Govt Has Not Violated Any IMF Agreement Even Without Increasing Petroleum Levy: Minister

Minister of State for Finance and Revenue Ayesha Ghaus Pasha has said that the government has not violated the International Monetary Fund (IMF) agreement by not increasing the Petroleum Development Levy on petroleum products.

She was briefing the Standing Committee on Finance and Revenue on Tuesday which met under the chairmanship of Qaiser Ahmad Sheikh.

Ayesha Ghaus Pasha said that the government has not violated the IMF agreement and it is expected to convince the IMF. The government has a quarter to impose the levy and will complete it by December. Pakistan is determined to complete the IMF program, she said.

Meanwhile, Finance Secretary Hamid Yaqub Sheikh told the committee that the government has collected Rs. 22 billion in the two months of July and August under PDL.

Ayesha Ghaus Pasha also said that Floods have devastated Pakistan’s economy. During the current fiscal year, the economic growth will slow down to 2 percent; therefore, the IMF, the World Bank and other international organizations have been told that changes will have to be made in this difficult phase, she added.

She said that fertilizers and seeds will be given free to the flood-affected farmers. Besides large pumps are being ordered from outside to remove water.

The committee also decided to discuss the proposed measures for rehabilitation of the flood affectees, agriculture and commercial sectors in its next meeting. It was of the view that the devastation caused by floods was massive and needs proper thinking and perpetual fiscal policy measures.

SME’s Saga

Chairman Committee Qaiser Ahmad Sheikh said that the loan schemes of SBP during the Covid-19 epidemic were given only to big and influential people, while small and medium businessmen did not get many loans.

The rate of lending from banks to SMEs is 7 percent, while for large industrialists it is 93 percent. He said that loans up to Rs. 5 billion were given only to influential people.

Committee member Ramesh Kumar said that benefits were given to influential industries and no loans were given to SMEs. Member committee Ali Pervez said that it is not correct to blame only one sector.

Member committee Burgess Tahir stated that the names of those people who were given Rs. 400 billion to Rs. 500 billion to big industrialists should be mentioned.

Governor SBP Jameel Ahmed apprised the committee that the State Bank had provided a lot of support to the businessmen and the people during the pandemic. SBP not only gave loans under the SME scheme but a low-cost housing scheme was also launched. Jameel Ahmed added that more than Rs. 100 billion were given under these two heads.

The central bank has also supported businesses under employment schemes to save employees from unemployment, he said.

Governor SBP briefed that a concessionary scheme for the export industry was given under which loans of Rs. 190 billion were given. Similarly, SBP has also disbursed Rs. 436 billion in loans under the TURF scheme. Loans of Rs. 5 billion were given under this scheme for setting up medium and large industries, which are still in the preparation stages.

Under this medium and large industries scheme, machinery worth $2.5 to $3 billion was imported while 610 borrowers benefited, he also informed the committee.

On this occasion, Chairman Federal Board of Revenue (FBR) Asim Ahmed said that tax refunds worth Rs. 338 billion were given in COVID-19 times. Besides, the Ministry of Finance also gave an additional grant of Rs. 110 billion rupees to entrepreneurs.