ISLAMABAD - Finance Minister Senator Ishaq Dar on Wednesday made it clear that Ministry of Finance would not clear the circular debt that mounted to Rs 262 billion, as he said Ministry of Water and Power should improved its recoveries from the consumers.
“This will not be a prudent decision that Finance Ministry clears the circular debt, as it is an issue of power the dues recoveries which should be collected”, said Ishaq Dar while addressing a press conference here. The power dues of the National Transmission and Dispatch Company (NTDC) has reached to Rs 500 billion, which should be collected from the consumers including private and public sector departments, he added.
The Finance Minister further observed that the Ministry of Water and Power must take the recovery side seriously and ensure payment by provinces and reconcile outstanding amount within 60 days, as per decisions made by CCI (Council of Common Interest) in its last meeting. The amount of circular debt is Rs 262 billion, he added.
On a question, Ishaq Dar informed Pakistan’s team lead by Chairman Federal Board of Revenue would leave for Switzerland by the end of August to hold negotiations for recovering untaxed billions of dollars of Pakistanis stashed away illegally in Swiss banks. “We will take benefit from the experiences of countries like UK and USA, those already engaged in legal process in this regard”, he said and added that process is lengthy and would take four to five years.
Ishaq Dar said that Pakistan and World Bank would sign the Dasu hydroelectric power project within August, most likely on 18th of this month. “The government has worked out the financing of Dasu project, as World Bank will provide $700 million and rest will made from other sources”, he added.
On a query regarding further $2.5 billion Saudi’s gift, the Finance Minister termed it a speculation and said, “Neither any request has been made from our side nor any indication come from their side”. Finance Minister Ishaq Dar says the government has no plan to devalue the currency.
He defended the government’s polices to reduce the soaring potatoes price in the country that kept it around Rs 80 per kg, otherwise it should have been gone to Rs 150 per kg, he added. He admitted that only 10 to 11 people have involved in black marketing of potatoes prices that forced the government to import the commodity at zero-rated.
Earlier, the Finance Minister Senator Ishaq Dar briefed the media on the first year’s economic performance of the incumbent government. He claimed that government has completely turnaround the economy during previous financial year 2013-14. He informed that GDP growth had registered at 4.14 percent during FY2014, which was below the target of 4.4 percent but highest in last six years.
Counting his economic successes, Ishaq Dar said that government has restricted the budget deficit at 5.7 percent of the GDP during last fiscal year as against the target of 6.3 percent. He added that deficit has been reduced by 2.5 percent in one year, as it was 8.2 percent during the preceding year 2012-13. He vowed to bring it down to four percent by the end of next fiscal year 2015-16.
Ishaq Dar said country’s foreign exchange reserves had surged to $14.1 billion on June 30 2014 wherein State Bank of Pakistan’s reserves were $9.1 billion. He was optimistic that government would achieve its target of increasing reserves to $15 billion before December 2014. The government has kept the exchange rate at Rs 99 for the ongoing fiscal year 2014-15, he added.
Talking about the revenue collection, the economic wizard of the PML-N government said Federal Board of Revenue had collected Rs 2266 billion during FY2014 as against Rs 1946 billion of the preceding year showing an increase of 16.44 percent. The government had once revised the target to Rs 2275 billion from Rs 2345 billion due to rupee appreciation in the last year he said and added that missing the target by Rs 9 billion was not a big deal.
Finance Minister informed that remittances had recorded increase of 13.7 percent in previous year, as country received remittances worth of $15.83 billion in FY2014 as against $13.93 billion of the preceding year FY2013. Exports rose to $25.13 billion in FY2014 from $24.46 billion of FY2013 registering an increase of 2.73 percent. Imports surged to $45.11 billion in FY2014 from $44.95 billion of FY2013 showing a growth of 0.35 percent. Trade deficit, a gap between exports and imports, reduced to $19.98 billion in FY2014 from $20.49 billion of FY2014 with decline of 2.55 percent.
Ishaq Dar further informed that inflation rate had surged to 8.6 percent in FY2014 from 7.4 percent of its preceding year. However, he blamed the caretaker government for increase in inflation, as it neither increased the power tariff not imposed taxes that had to do by the incumbent government. The Large Scale manufacturing sector had registered growth of 4.2 percent during (July-May) period of the previous year 2013-14, which was 3.9 percent in the corresponding period of its preceding year. The per capita income had soared to $1386 in FY2014 from $1340 of FY2013. The companies’ incorporation had enhanced to 4587 in FY 2014 from 3953 of FY2013.
Finance Minister said that government’s borrowing from the State Bank of Pakistan had reduced to Rs 303 billion in FY2014 from Rs 1446 billion of FY2013.
Ishaq Dar had informed that spending on public sector development programme had exceeded than the target, as government spent Rs 441 billion on PSDP against the target of Rs 425 billon.
Apart from the above indicators a number of achievements of the government have gone to break the barriers that had emerged in attracting foreign investment in the country. The most notable are: raising of $2 billion through Euro Bond after 7 years; Successful auction of 3G-4G licenses, that hadalluded previous government for nearly 5 years. Nearly $1.2 billion were raised and some more licences are still available for sale; Resumption of program lending by World Bank and ADB after nearly 5 years that has enabled us to access some $1.5 billion from these institutions during the year and successful revival and resumption of theprivatization program, whereby we have already divested the shares of UBL (about $400 million) and PPL (subscription Rs.30 billion, which is highest ever in stock market history and realization of Rs.15.3 billion).