Bharat Rakshak

Dry coconut giving sleepless nights to baki traders

Karachi Chamber of Commerce and Industry (KCCI) President Iftikhar Ahmed Vohra has requested Finance Minister Ishaq Dar to stop the illegal barter of dry coconut on the Line of Control (LoC) between Azad Jammu and Kashmir and the Indian-held Kashmir.

Vohra, in a letter sent to Dar, said some KCCI member firms had complained about the misuse of cross-LoC trade that had brought businesses of dry coconut importers to the verge of collapse.

“Dry coconut can be removed from the barter list to save local traders from severe losses.”

He said under the cross-LoC trade, barter of goods being produced and manufactured in Azad Jammu and Kashmir and the Indian-held Kashmir was only allowed but nowadays terms and conditions were being violated as dry coconut, which was not produced in any of the two regions, was being bartered.

This dry coconut ultimately lands in Rawalpindi and is later sold in various markets of Karachi and other cities across Pakistan, resulting in losses to legal importers.

Vohra said the misuse of trade was not only affecting local businesses but was also causing a loss of Rs1 billion per annum in lost taxes, which the national exchequer otherwise receives from the legal importers of dry coconut.

“There are speculations that dry coconut may be added to the barter list of cross-LoC trade, but it will be totally unacceptable to the local businessmen and importers.”

Vohra asked the finance minister to take steps to put an end to the illegal trade in dry coconut and ensure that the item was not added at any cost to the barter list.

In a written statement in response to a question asked in the National Assembly on Thursday, the water and power minister confirmed that the total amount under circular debt is at Rs258bn as of end February, whereas the receivables of the Discos are Rs552bn.

pankajs wrote:PIB India @PIB_India · 25m 25 minutes ago >>
* 22,566 MW capacity added during current year against a target of 17,830 MW. Highest ever achievement in a single year. #1TrillionUnits
* Power generation during current year is 1048 BU .Growth of 8.4% over the previous year. Highest growth in last two decades. #1TrillionUnits
* Annual electricity generation crosses #1TrillionUnits. First time in our history .

Lately, Punjab tried to revise its expected yield down to 18 million tonnes (down from 19.50 million tonnes) but was very heavily snubbed by the federal government for bringing the national production figures down by 1.5 million tonnes, or, in monitory terms, a loss of Rs45 billion – grossly affecting the GDP.

The province cannot project a lower figure for fear of the federal government, cut in GDP and lenders later questioning growth figures.

ISLAMABAD: Pakistan’s exports of textile and clothing fell by 1.21 per cent in 10 months of the current fiscal year from a year ago.

Oil and food: Import bill of oil and eatables in July-April 2014-15 witnessed a decline of 10.298pc to $14.06bn from $15.674bn in the same period last year.

However, total import bill during the period increased by 1.83pc to $37.763bn from $37.084bn a year ago.

The import bill of food products witnessed a surge of 21.76pc to $4.205bn as compared to $3.453bn.

The import of wheat witnessed an increase of 72.90pc; pulses 34pc and all other products 57.67pc. Import bill of sugar also increased by 11.34pc.

Oil import bill reached $9.855bn during the period under review as against $12.221bn in July-April 2014-15, a decline of 19.36pc.

Import of crude oil declined by 24.29pc and petroleum products by 16.26pc.

Economic Survey 2014-15 has acknowledged that electricity generation and distribution and gas distribution recorded a growth of 1.94 percent this year compared to 5.57 percent last year ...

....The Survey also rejected the claim of National Electric Power Regulatory Authority (Nepra) that the power sector crisis is responsible for 2-3 percent reduction in GDP, saying that exact cost is still unfolding for Pakistan.

....According to the Survey the government retired the circular debt (Rs 480 billion) immediately after taking oath which added 1752 MW of electricity into the system. In FY 15, the current level of circular debt is around Rs 250 billion including current payable. Interestingly, the IMF claims that circular debt has reached 500 billion ( Rs 270 billion current circular debt and Rs 230 billion parked in Power Holding Company).

....The Survey states that lower tax to GDP ratio restricted the government in financing energy projects...

In 2014, per capita availability of primary energy supplies was estimated at 0.36 TOE.

ArmenT wrote: Not sure if their oil import bill has decreased because of fall in oil prices. Would be more helpful if they published their imports in barrels or metric tons or whatever. Interesting thing is that despite all that, their import bill has gone up!

Despite a considerable decrease in prices of petroleum products including crude oil and closure of CNG sector during current year, the imported quantity of petroleum products did not increase. In fact import of petroleum crude declined by 6.3 percent in quantity as compared to corresponding period last year.

Large Scale Manufacturing (LSM) – which constitutes 80% of Pakistan’s manufacturing sector –registered a meagre growth of 2.5% in the first nine months (Jul-Mar) of fiscal year 2015 compared to 4.6% in the same period last fiscal year, the Economic Survey of Pakistan 2014-15 revealed.

Pakistan’s estimated population is 191.71 million in 2015 — in 2014 it was estimated at 188 million in 2014.

A_Gupta wrote:http://arynews.tv/en/pakistan-sees-a-ri ... in-2014-15
"Pakistan sees a rise by 100,000 in the number of donkeys in 2014-15"

Seems too low.

Petrol pump owners have warned of the possibility of another petrol crisis in the next two or three days.

According to a statement issued by the Pakistan Petrol Pump Dealers Association on Wednesday, petrol pump owners have not been supplied enough petrol to meet the demand.

“Fifty per cent less petrol has been supplied to the petrol pumps throughout Punjab, including Lahore,” the statement said.

So it looks like much of the growth touted by the finance minister has come from the record profits made by banks on the back of heavy lending to government, from sudden increases in livestock, from large quantities of cotton being ginned, from a tremendous expansion in general government services, and from elevated levels of consumer spending and from an expansion in mining and quarrying activity, wherever this may have occurred.

This is a pretty random list if you think about it. None of these sectors have anything to do with each other, so it’s not clear what “broad-based growth” they’re talking about in the opening chapter of the Economic Survey.

Just consider, for instance, that if there is such a large increase in cotton ginning, why is the rest of the textile sector showing a declining growth rate? Where did all this ginned cotton go? There is only one customer for ginned cotton in Pakistan and that is cotton spinning. How can it be that one section of the cotton chain is booming while the rest of it is showing a steep fall in its growth rate?

There is a house building and construction boom under way. We can see these trends with the naked eye even, where appliance stores and shopping malls are packed and the roads are full of the latest models of locally assembled cars and newer varieties of used cars and swanky new buildings are being built everywhere.

Pakistan's Fiscal 2015-16 Budget Was Prepared and Finalized by Nawaz Sharif and Family Insiders

ISLAMABAD:
Prime Minister Nawaz Sharif and his team have sidelined the Federal Cabinet, National Assembly Standing Committee on Finance, ruling party’s lawmakers and allied parties from consultations on the budget for fiscal 2015-16, The Express Tribune has learnt.

A source claimed that the PM’s son-in-law Capt (retd) Muhammad Safdar had put together the Public Sector Development Programme for the upcoming fiscal year. “Even Planning & Development Minister Ahsan Iqbal was kept out of the loop.”

Federal Board of Revenue (FBR) Chairman Tariq Bajwa, a close friend of the Sharif family, and Finance Minister Ishaq Dar have prepared the budget with the aid of other close friends, said the source.

Asked who attended this meeting, Khan refused to disclose their names. He only said that all the participants were picked by the minister himself.

Pakistan had a good week. Index provider MSCI surprised many observers by announcing that the South Asian nation will be included in MSCI’s 2016 review for potential upgrade to emerging markets status.

Later in the week, investors pounced on the opportunity to buy into Pakistan’s first real estate investment trust in a heavily oversubscribed IPO. And ratings agency Moody's upgraded the country’s foreign currency ratings to B3 from Caa1, citing “continued strengthening of the external payments position and sustained progress in structural reforms under the government’s program with the IMF.”

In another news flash, our Sino friends invested $218 million in 11MFY15, which is quite a drop from an inflow of nearly $600 million last year

In what was supposed to be a year of "stability", foreign direct investments nearly halved in the eleven months ending May 2015; from $1.5 billion in 11MFY14 to $803 million in 11MFY15.

“After improving ratings from the international rating firms like Moody’s and Standard and Poor, the Pakistan’s foreign investment will shoot up in near future,” said Sohail, analyst at a brokerage house.

“Once China started pouring investment in the country, the trust of most of the foreign countries will enhance and they will invest in Pakistan,” he added.

In fact, the highest FDI worth $228 million was received from United States of America during the eleven months. Other top investors were China ($218 million), the UAE ($209 million) and Italy ($105 million).

Pakistan would remain the lowest performer in terms of Gross Domestic Product (GDP) growth rate in 2016 and 2017 in the South Asian region not even barring war-torn Afghanistan, Global Economic Prospects (GEP) report published by the World Bank maintains. GDP growth rate for Pakistan is projected by the World Bank at 5.7 percent in 2014, 4.8 percent in 2015, 4.12 percent in 2016 and 4.5 percent in 2017.
...
Afghanistan with a rate of 2 percent in 2014 and 2.5 percent in 2015 is expected to overtake Pakistan''s growth rate in 2016 with 5 percent and in 2017 with 5.1 percent. Nepal''s growth rate would be lower than Pakistan''s in 2014 with 4.8 percent and 4.4 percent in 2016 but would then overtake it with 5 percent in 2016 and 5.5 percent in 2017.

...Pakistan will struggle to invest in CPEC, especially if it maintains its stance on not financing CPEC with public debt, which already stands at 61.2% of GDP. Financing shortfall on the Pakistani side will widen the gap between promised and realised Chinese investment.

More than 5,000 policemen in Lahore wear worn out uniforms because they haven’t been given a new uniform in five years, reports Nai Baat (April 28). The department is expected to give out three uniforms a year. Police officers say they cannot do that because of a lack of funds. - See more at: http://www.thefridaytimes.com/tft/nugge ... QsV2S.dpuf

WASHINGTON: The World Bank and Pakistan on Thursday signed the Second Fiscally Sustainable and Inclusive Growth Development Policy Credit (DPC). The credit amount of $500m is to support Pakistan’s efforts to reinvigorate growth and stabilise the economy, Radio Pakistan reported.

The accord was signed in Washington between the World Bank Vice President, South Asian region Annette Dixon and Pakistan’s Ambassador to the United States Abbas Jilani.

During the session, Jilani stated that another credit agreement of the same kind, worth $500 million would be signed in September this year for energy sector reforms.

ISLAMABAD:
Pakistan and International Monetary Fund’s (IMF) relations will now test deeper waters as the Washington-based lender now expects Islamabad to start focusing on deep structural reforms, particularly in neglected areas of energy and taxation.

The upcoming approval of the eighth loan tranche of $506 million by the Executive Board of the IMF, which is tentatively scheduled to meet on June 26, will mark the beginning of phase-II that will focus on areas that Pakistan has so far failed to deliver in.

In a recent conversation with journalists, IMF Resident Representative in Pakistan Tokhir Mirzoev said the primary focus in the initial stages of the programme was on measures to stabilise the economy.

Key achievements to date include a low interest rate, low inflation, declining budget deficit, and higher reserve buffers.

After the stabilisation, the IMF now wants Pakistan to implement reforms in troublesome areas.

At a joint press conference in May, IMF Mission Chief Harald Finger emphasised structural reforms in tax administration, energy sector, restructuring of state-owned enterprises, and improving the business climate will be a priority in the remainder period of $6.6-billion bailout package.

In its last communiqué issued in May the IMF states, “The authorities’ reform programme has reached its mid-point, and already produced important economic achievements: near-term risks have receded, foreign exchange buffers have been rebuilt, and the budget deficit has narrowed substantially.

“In an environment of low international oil prices, these achievements create ideal conditions to focus on deep structural transformation of the economy,” said Mirzoev.

He said it would be important for the government to use this opportunity to advance structural reforms in the remainder period of the IMF programme, which is going to end in September 2016.

Meanwhile, progress on taxation reforms has been slow. In fiscal year 2014-15 budget, which is ending on June 30, the government withdrew Rs103 billion Statutory Regulatory Orders.

There was hope that the cost of tax exemptions that the government estimated at Rs477 billion by the end of fiscal year 2013-14 would come down to around Rs375 billion by close of this fiscal year.

However, the Economic Survey of Pakistan that the Finance Minister launched early this month revealed that instead of coming down, the cost of tax exemptions has gone up to Rs665 billion.

Out of Rs665 billion tax exemption, the cost of sales tax exemptions was Rs478 billion, according to the survey.

An amount of Rs389 billion was lost due to exemptions given to industries under the sixth schedule of the Sales Tax Act.

An amount of Rs286 billion was lost at the domestic stage and another Rs103 billion at the imports stage. The IMF said it was examining the reasons behind surge in cost of tax exemptions.

When asked, FBR Chairman Tariq Bajwa did not have answer as to why the cost went up despite withdrawing the SROs.

Tax collection has been a long-standing concern. As against the original target of Rs2.810 trillion, the FBR will be unable to collect more than Rs2.6 trillion despite levying Rs360 billion additional taxes in a single year.

The numbers of income tax filers stood at only 880,000, said Bajwa last week. The target was 1.2 million people.

ISLAMABAD:
The Asian Development Bank has postponed the approval of the second $400 million tranche of a $2 billion loan for energy sector reforms due to the government’s inability to meet many of the preconditions that it had promised to deliver on before the lender’s most recent board meeting.

As of now, the Board of Directors of the Manila-based lending agency will not take up Pakistan’s case for approval of a $400 million loan in its June 29 meeting, according to officials at the Finance Ministry. The ADB’s decision to defer the approval deals a blow to the government that has been making claims of progress on the energy front.

The government was eager that the ADB should approve the loan before June 30 – the last day of the outgoing fiscal year 2015. The delay in approval will disturb its plans to build foreign currency reserves to the satisfaction of the International Monetary Fund besides denting the government’s claims of success in improving the mostly state-owned energy sector.

The ADB’s decision to delay the approval of the second tranche is different from the approach that the World Bank has adopted towards Pakistan.Despite missing all the targets that the World Bank had set for Pakistan under its first tranche of $600 million that it approved last year, the Washington-based lender is going to approve $1 billion for power and growth this month.

However, the Finance Ministry insists that the World Bank is approving loans only after it was satisfied with Islamabad’s performance.

The $400 million ADB loan was critical to meet the IMF’s projections of building up Pakistan’s foreign exchange reserves. For the last quarter of the outgoing fiscal year (April-June), the IMF had set a $6.75 billion Net International Reserves target for the government. But the Finance Ministry said that the NIR target was subject to approval of the ADB and the World Bank loans.

The IMF had also projected gross official foreign currency reserves at $15.4 billion for the outgoing fiscal year. By first week of June, the State Bank of Pakistan’s official reserves stood at $12.3 billion, according to the central bank. Pakistan will receive $1 billion from the World Bank and $506 million from the IMF before end of this month, taking its gross official reserves to close to $14 billion, still short of the IMF’s projections by roughly $1.4 billion.

ISLAMABAD:
In a bid to meet the International Monetary Fund’s requirement to raise gross official foreign currency reserves to $20 billion, Pakistan is planning to raise $1 billion from international debt markets through a Eurobond offering during fiscal year 2016.

For the next fiscal year, IMF balance of payments projections show that Pakistan is required to increase its gross official foreign currency reserves to $20.2 billion, excluding the commercial banks’ reserves. This would require Pakistan to add an additional $5 billion in the reserves held by State Bank of Pakistan, which seems a monumental task. For the outgoing fiscal 2015, the IMF has asked Pakistan to increase the reserves to $15.4 billion.

As of May 1, the SBP’s gross official reserves stood at $12.51 billion and the government needs another $2.8 billion to hit the annual target. It is expecting a $500-million IMF tranche and $1.4 billion from the World Bank and the Asian Development Bank before the end of June.

Earlier, in March last year, the government raised $2 billion by floating five- and 10-year dollar-denominated bonds at interest rates ranging between 7.25% and 8.25%. In the second attempt, the government issued five-year $1 billion Ijara-Sukuk bonds at 6.75%.

The only increase in the reserves through non-debt instruments was the $1.5 billion ‘gift’ from Saudi Arabia and over $1 billion in proceeds of from the sale of government stakes in companies like Habib Bank, United Bank and Pakistan Petroleum.

Huge external borrowings were largely facilitated because of the umbrella of the IMF bailout programme, wrote Dr Hafiz Pasha, a former finance minister, in the latest report on Pakistan’s state of economy issued by the Institute of Policy Reforms, an Islamabad-based think tank. The IPR has projected that in the next fiscal year the current account deficit – the gap between foreign receipts and payments – is likely to widen by over $3 billion to $5.4 billion.

It said that this is largely due to larger imports of machinery for power projects being executed with the Chinese assistance.