Mr speaker, today I am presenting the fifth consecutive budget of the PML-N government with Allah’s (SW) blessings and mercy. It is for the first time that a fifth consecutive budget is being presented by the same prime minister and finance minister. This is reflection of strengthening of democracy for which the entire nation can feel proud. And it is with great humility that I thank Allah (SW) that He has given this opportunity to an ordinary person like me.
Before I go into the details of the next financial year’s budget, I would like to give a brief resume of the distance that we have traversed in the last four years. It would not be an exaggeration on my part to say that in June 2013 Pakistan was on the brink of default on its financial commitments. Our Forex reserves were at an historic low covering only two weeks’ worth of imports. Large payments were falling due and what to say of the commercial banks even the multi-lateral development partners were shy of undertaking any new business with Pakistan. The FBR revenues had grown only by 3.38% for that year, expenditure was high and the result was a fiscal deficit of over 8% of GDP. Energy outages were pandemic, the loadshedding hours in a day were longer than those in which electricity was available. Load shedding in cities was for 12 to 14 hours while in villages was 16 to 18 hours. The writing on the wall was obvious. From macroeconomic perspective, Pakistan’s economy was declared as unstable internationally.
Today, Pakistan is on the cusp of a high growth trajectory. Our GDP has grown this year by 5.3% which is a 10-year high. Foreign exchange reserves are at a comfortable level, sufficient to cover about 4 months of imports; tax revenues have increased by 81% over the last four years translating into an average annual increase of 20%; since 2013 credit to private sector has increased by over five times; fiscal deficit will be around 4.2 percent; there has been over 40% increase in imports of capital goods this year; gas availability has improved, and load-shedding for industry has been eliminated and substantially reduced for commercial and domestic sectors - Inshallah next year will be the year of complete elimination of loadshedding.
The writing on the wall is obvious even today - only the message has changed. Today globally credible institutions like Price Waterhouse Coopers have said that “Pakistan economy is set to be among the 20 largest economies (G20) of the World by 2030”. The whole of the nation deserves to take credit for this impressive turnaround and we thank Allah (SWT). Without His help this would not have been possible in such a short time.
I would like to take this opportunity to congratulate the Parliament, the Prime Minister Nawaz Sharif, and indeed the entire nation that after a long-time Pakistan has this year borrowed loans only for national development. Earlier we were not only borrowing for our national development needs but also for our non-development expenditure. This was leading us to a downward economic spiral where we had to borrow to cover our expenses and a very large percentage of the budget was being spent on debt servicing. This turnaround has been made possible by prudent fiscal management, continued focus on enhancing revenues and reducing nondevelopment expenditure. This is not an ordinary achievement. Borrowing for development is acceptable for any country or an organisation as the socio-economic returns outweigh the cost of borrowing. Investing in the people of Pakistan and its infrastructure will lead to even higher, sustainable and inclusive growth.
I would like to inform this house that as per the party manifesto of PML(N), Pakistan has successfully completed its reform programme. During this period difficult key structural reforms in the country have been implemented. Completion of the programme has strengthened confidence of the international community in government’s economic agenda. The government has put the country on the path of self-sustenance which is being internationally recognised and is reflected in the improved ratings by all major rating agencies including Moody’s, S&P and Fitch.
Mr speaker, I would now present before this august House the main highlights of Pakistan’s economic performance in the last four years: Real GDP Growth at 5.28% this year is the highest in the past decade. Four years’ ago, the economic growth was 3.68%. Considering that the World economy is likely to grow by 3.5% this year, Pakistan’s economy is performing better than most countries in the World. There has an improvement in every aspect due in Pakistan due to economic growth. For the first time the size of the economy has surpassed $300 billion; Alhamdolilah, our agriculture sector has turned around. The sector has performed impressively this year. Compared to last year’s stagnation this sector has registered a robust 3.46% growth. All major crops including Wheat, Cotton, Sugarcane and Maize have registered healthy growth. This turnaround in agriculture from stagnant growth is a result of the Prime Minister’s Kisaan package announced in September 2015 and the extraordinary measures approved by this house as part of budget 2016-17.
Industrial production grew by 5.02% and businesses are now hiring additional workers. Services sector - which includes banks, retail, transportation, housing, etc. - grew by 5.98%. On average, income of each Pakistani has increased by 22% since fiscal year 2012-13. Per capita income today stands at $1,629 as compared to $1,334 four years ago. Inflation was on average 12% between 2008-13. In this current year inflation is expected to be around 4.3%;
Fiscal deficit: The government followed a policy of fiscal consolidation because of which fiscal deficit reduced from 8.2% to the current year’s 4.2%. This was achieved through higher revenue collection through improved administration and broadening of the tax base, undoing decades-old concessionary SRO and curtailing non-development expenditure of the government;
FBR Revenues: In fiscal year 2012-13 FBR collection was Rs.1,946 billion. For the current year the target is Rs.3,521 billion. This represents a historic increase of 81% in the last 4 years with average annual growth of 20%. Tax to GDP ratio which was 10.1% in fiscal year 2012-13 is likely to increase to 13.2% this year. Policy rate of State Bank of Pakistan has come down from 9.5% in June 2013 to the current 45-year low of 5.75%. Similarly, mark-up rates of Export Refinance Facility have been reduced from 9.5% in June 2013 to 3% in July 2016. In addition, the mark-up rate on Long Term Finance Facility has been gradually reduced from 11.4% in June 2013 to 6% for exporters and 5% for textile sector. This has led to a spurt in credit to the private sector. Resultantly, credit to private sector has grown to Rs507 billion till May of this year, as compared to Rs.93 billion in fiscal year 2012-13, resulting in expansion of business activity in the country. Agriculture credit was Rs.336 billion four year’s ago which at the end of 2016 was Rs.600 billion and is targeted to increase to Rs.700 billion during the current financial year.
Imports: Imports have been recorded at $37.8 billion during July-April showing an upward trajectory compared to the same period last year. This vibrancy in imports is attributable to over 40% increase in capital machinery, industrial raw material and petroleum products and the increased investment under the CPEC projects focused on energy and infrastructure sectors. All of this augurs well for Pakistan’s economy in the near future. Exports during the first ten months of this year have shown an overall minor decrease of 1.28% compared to 7.8% decline during the same period last year. This reversal has been the result of timely support by the govt to exporters in shape of a comprehensive package of Rs.180 billion in January 2017 and efforts of our exporters.
Foreign Exchange Reserves: In June 2013 foreign exchange reserves held with the State Bank were $6.3 billion which included short-term swap of $2 billion for which payments were to be made within weeks. This means that the real reserves were $4.3 billion. Our foreign exchange reserves currently stand at a comfortable level of $16 billion despite a larger than expected trade deficit mainly due to increased import of capital goods. If we include foreign exchange deposits with commercial banks, the total foreign exchange reserves of the country have increased to around $21 billion.
Exchange Rate: Inter bank rate of dollar on 30th June 2013 was Rs.99.66. Within a few months this rate increased to around Rs.111. After better economic management and increase in foreign reserves the exchange rate reverted to Rs.99. Due to political disturbances between August and December 2014 the rate again increased close to 104.80. Since then this rate is the same.
Remittances: Over the past four years, Pakistani workers and professionals working abroad have contributed a substantial amount of remittances which increased from $13.9 billion to $19.9 billion. This 40% increase was made possible due to government’s revival and payment of outstanding dues of Pakistan Remittance Initiative. The remittances for the first ten months of the current FY stand at $15.6 billion and are expected to grow in the last two months due to Ramazan and Eid despite challenging economic situation in the gulf region. I thank the hard-working Pakistanis abroad who used banking channels to send money to their relatives and friends in Pakistan and I appeal them to use banking channels to send remittances so that they can be contribute to Pakistan’s economy.
Pakistan Stock exchange: The merger of the three stock exchanges was completed in January 2016 after successful resolution of issues pending for over a decade. Since then, Pakistan Stock Exchange has graduated from frontier to emerging markets in the Morgan Stanley Capital International (MSCI) Index. It has been declared as Asia’s best performer and 5th best performing market in the World by Bloomberg. It is note worthy that the index has increased from 19,916 on 11 May 2013 to over 52,000 points currently. And during this period market capitalisation has increased from $51 billion to $97.3 billion depicting a 90% increase.
Registration of New Companies: This year 5,855 new companies have been incorporated till March. Four years ago, in the entire financial year 3,960 companies were incorporated. Enactment of Economic Laws: For an economy to unleash its growth potential, there has to be in place an enabling legal and regulatory environment. Realising the constraints that a less than effective legal framework imposes on efficient governance and service delivery, the government has in its tenure completed 24 pieces of legislation in different sectors of the economy including; Benami Transactions Prohibition Act, Special Economic Zones Amendment Act, Deposit Protection Corporation Act, Credit Bureau Act, Corporate Restructuring Companies Act, National Energy Efficiency and Conservation Act, Anti-Money Laundering Act, Gas Theft Control and Recovery Ordinance, and Limited Liability Partnership Act. 10 new pieces of legislation are currently in the process which would lead to further augment the enabling legal environment required for a flourishing economy.
Companies Law: The Parliament has approved the companies law 2017 only this week. I thank congratulate both the houses. This law has replaced the 33-year old Companies Ordinance of 1984. This is a major reform to consolidate the provisions / laws relating to companies so as to encourage and promote corporatisation in Pakistan based on the best international practices. This law will simplify procedures creating ease of starting and doing business and protect investors. It addresses issues related to protection of minority shareholders and creditors, eases regulatory compliance requirements for smaller companies, and among others provides relaxation for registration of agricultural promotion companies for the development of agriculture sector. Keeping in view the importance of women, the new law will allow women membership in boards of directors of listed companies.
Ease of Doing Business: Reforms have been undertaken to make it easy for firms to do business in the country. As a result, Pakistan’s ranking in the World Bank’s ease of Doing Business index improved from 148 to 144 in the report launched in 2016, based on performance in 2015. Pakistan was also recognised as one of the top ten reforming countries in the World. On the basis of additional reforms undertaken during the period 2016, Pakistan expects further improvement in the ranking of World Bank’s Doing Business report to be published in October 2017;
To encourage documentation in the economy, for the first time registered prize bonds of Rs.40,000 have been introduced. Registered bonds of different denominations will be introduced in FY 2017-18. The above accomplishments are the result of timely but difficult decisions that the government has taken over the past four years. We are resolved to continue the journey towards structural reforms with stabilisation measures. I would now highlight some of the key reforms that have been undertaken this year: We have signed the letter of intent to join ‘Open Government Partnership’ initiative. The OGP is a global partnership of over 70 countries including most of the developed countries. While a country can show its intent to join, its membership is by invitation only when you meet its criteria. The fact that we met 15 of its 16 criteria; and Pakistan was formally invited to join OGP on the 7th December 2016, which itself speaks of the major improvements that Pakistan has made in transparency and openness in its governance; OECD’s Multilateral Convention: In the last budget speech, I said that we were trying our best to sign the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters. This was based on our commitment to fight tax evasion and avoidance. In January 2014, after Federal Cabinet’s approval we started the journey. Since then, the Coordinating Body (CB) of the Multilateral Convention evaluated Pakistan’s laws. Based on their recommendations, this Parliament made changes to income tax laws through Finance Bills 2015 and 2016 after which Pakistan received invitation to join the Convention in July 2016. On 14th September 2016, representing Pakistan I signed the joining documents of the Convention. As a result of joining this Convention, in the matters of tax at an international stage, we will be able to receive details in coming years. This will help us improve our tax governance and tax avoidance will be effectively tackled.
Agreement on Avoidance of Double Taxation (AADT): We have also now signed the revised agreement on Avoidance of Double Taxation with Switzerland. Pakistan’s existing Agreement with Switzerland signed in 2005, and enforced in 2008, was deficient for meaningful exchange of information with reference to the internationally accepted standard. Therefore, this government took the initiative in August 2013 to renegotiate the AADT and with consistent efforts, was able to update the Article on exchange of information in the treaty. The revised treaty is now in the process of ratification and shall become effective thereafter. Under the agreement for the purposes of tax, details will be available regarding financial books and banking. I would also like to point out that renegotiations took longer than expected because the Swiss side was seeking extraordinary concessions in return. Alhamdolilah, we have been able to successfully include these negotiations without conceding any concessions. These reform efforts have improved Pakistan’s image abroad and sent a message to the international community that Pakistan’s believes in joining the World in promoting good governance, transparency, and accountability at all levels.
Mr speaker, the brief overview of main economic performance indicators that I have just presented clearly demonstrate that over the past four years’ after achieving macroeconomic stability our government’s focus as per the Vision of the Prime Minister Nawaz Sharif is higher, inclusive and sustainable growth path. I have mentioned some of the structural reforms undertaken during the past four years. From next year, our top priority will be to consolidate and build on the economic gains achieved so far. In this regard, I will now discuss next year’s economic targets.
Economic targets of FY 2017-18: Increase in real GDP growth of 6%; Investment to GDP 17%; Development budget of Rs.1,001 billion (4) Inflation below 6%; Budget deficit at 4.1% of GDP; Tax to GDP ratio at 13.7%; Foreign exchange reserves level that can cover a minimum of 4 months of imports; Net public debt to GDP ratio below 60% of GDP; Continuation of targeted social interventions.
In order to achieve the above targets, we have defined a strategy which includes the following details: FBR revenues are targeted to increase by 14% while the Federal expenditures will grow by 11%; Non-tax receipts of the Federal government are budgeted to increase by 7%. By keeping the current expenditure under tight control, we will be able to create substantial space for development. Federal PSDP for the next year is budgeted at Rs.1,001 billion. This is 40% higher than revised estimates of Rs.715 billion for the current financial year. If we add the provincial ADPs the outlay for development of FY2017-18 would be a whopping Rs.2.1 trillion.
At the same time, current expenditure will be contained below the level of inflation; New initiatives are being announced for agriculture, financial sector, exports, textile, social sector and employment. This is being done with the aim to boost our economic activity even further. The purpose is to increase job prospects and incomes of the people. I will present these initiatives in a short-while.
Tax incentives are being announced with the aim to give facilitation to the agriculture, SMEs, and IT sectors; Under the leadership and personal supervision of Prime Minister Nawaz Sharif through Cabinet Committee on Energy, approximately 10,000 MW of electricity will be added to the national grid by summer 2018. This will Inshallah eliminate load shedding; Investments will be made to speed up the process of development of Gwadar including development of airport, hospital and desalination plant; Around 5.5 million women-led families in the country who do not have economic means for sustenance will continued to be provided with cash transfer of Rs.19,338 per annum. For this purpose, Rs.121 billion are proposed to be allocated to Benazir Income Support Programme. This allocation has increased to 300% of Rs.40 billion in fiscal year 2012-13. During this period, the number of recipient families have increased from 3.7 million families in 2013 to around 5.5 million. In addition, around 1.3 million primary school children are receiving cash grants.
The state will continue to subsidise bills of the low-income domestic consumers up to 300 units per month in shape of electricity subsidy. For the farmers in Balochistan, the Federal Government will pay a portion of their electricity bills to run agriculture tube wells. The Federal Government’s will continue to provide electricity subsidies on tube-wells in Balochistan. Off-peak rate of Rs.5.35 per unit for agriculture tube-wells will continue in the FY 2017-18. An amount of Rs.118 billion has been proposed in the FY 2017-18 for these measures. The Prime Minister’s youth schemes which include business loan scheme, interest free loan scheme, training scheme, skill development programme, fee reimbursement, and laptop programme will continue. For this purpose Rs.20 billion is proposed in the fiscal year 2017-18.
Mr. Speaker, Under the leadership of the Prime Minister we are committed to serve people of this country. This nation deserves a better and brighter future. In this regard, I will now present special initiatives: BISP Beneficiary Graduation Program - Grants to Self-Sustaining Individuals: Previously, the poverty incidence in the country was measured under the Food-Energy Intake methodology in which the poverty headcount that was 34.7% in 2002 reduced to 9.3% in 2014. However, Pakistan has now also adopted a new methodology based on the Cost-of-Basic-Needs (CBN) formula of World Bank. Under this methodology, the poverty headcount which was over 64% in 2002 has reduced to 29.5% in FY 2014. While the government is providing support to people with limited income, it is also encouraging the beneficiaries of Benazir Income Support Programme to learn skills and start their own enterprises so that they can graduate out of the scheme. To finalise this transition the government is announcing a new scheme. In the FY 2017-18, BISP beneficiary families who are willing to start their own businesses will be provided with training as well as a one-time cash grant of Rs.50,000 to start their own business and become productive members of society. Initially this grant is proposed to be provided to 250,000 families. The beneficiaries will therefore, be able to graduate from this programme.
Off grid solutions in small cities: In order to facilitate provision of electricity to remote areas and small cities where there are no transmission lines, the Government, in partnership with the World Bank, will introduce solar-powered offgrid electricity system for residents of small towns and cities in sparsely populated areas of the country with special focus on Balochistan.
Agriculture Sector: Agriculture is the mainstay for the people and the economy of Pakistan. Keeping in view the primacy of agriculture in the rural economy the Prime Minister announced a Kisaan Package in 2015 with a total financial outlay of Rs.341 billion which included direct support to rice and cotton farmers, reduced taxes on agriculture machinery from 45% to 9%, reduced Sales Tax on cold chain machinery from 17% to 7%, a tax holiday for agriculture delivery chain for three years, provision of mark-up free loans to the farmers for solar tube wells, reduced sales tax on pesticides and seed, reduced mark-up for agricultural loans, subsidised crop insurance and increased volume of agricultural loans. In order to give further boost to agriculture sector, a number of new supportive initiatives were taken in budget 2016-17 including; crop loan insurance scheme, livestock insurance scheme, concession of customs duty on the dairy, livestock and poultry sectors, elimination of sales tax on pesticides, exemption of customs duty on cool chain machinery and silos, and reduction in fertilizer prices. As a result, the staple agriculture input of urea fertilizer reduced to Rs.1,400 per bag as compared to Rs.1,800 last year and DAP prices reduced from Rs.4,200 per bag to Rs.2,500 per bag. Reduction in prizes of fertilizer was achieved through a mix of subsidies and tax concessions. The outcomes of these measures are evident in increase in offtake of fertilizers and production of major crops. As a result of these measures a stagnant agriculture sector has grown by 3.46% in FY 2016-17. All of these schemes and initiatives shall continue in next FY 2017-18.
The following new measures are being proposed in the next year’s budget: Reduced mark-up rates: Mark-up rates currently charged ranges between 14% to 15%. I am happy to announce that from 1st July 2017, ZTBL and National Bank of Pakistan will launch a new scheme for small farmers with holdings of 12.5 acres who will be provided agricultural loans at a reduced rate of 9.9% per annum. The other features of the scheme are: Small loan of up to Rs.50,000 per farmer will be provided; Two million loans shall be provided by ZTBL, NBP and other banks; State Bank of Pakistan will monitor the implementation of this new scheme.
Enhancement in the target of agriculture credit: Credit availability for the small farmers is a major constraint in the use of farm inputs. In order to facilitate the farmers, the volume of agriculture credit is being enhanced to Rs.1,001 billion from the last year’s target of Rs.700 billion which will be an increase of 43%. My Parliamentarian colleagues may kindly note that this target exactly matches Federal development budget of Rs.1,001 billion for the FY2017-18.
Maintaining Fertilizer Prices: As a further measure to support farmers, the govt has already decided to sell the existing stock of imported Urea Fertilizer available with NFML at a concessional Rs.1,000 per bag. In order to create ease of disbursement of subsidy on DAP, it has been decided that DAP will be subject to fixed sales tax. As a result, GST is being reduced from Rs.400 to Rs.100. This will have a subsidy impact of Rs.13.8 billion. Through reduction in tax rates and subsidy the price of per bag of Urea shall be maintained up to Rs.1,400 per bag in the FY 2017-18. This will have a subsidy impact of Rs.11.6b. Prices of NP, NPK, SSP and CAN fertilizers will also be maintained at their current price levels through appropriate tax adjustments.
Use of Land Revenue Records for Mortgage Financing: In order to facilitate the farmers in obtaining credit from banks, the State Bank of Pakistan shall take steps to align the banking system with the Land Record Management Information System for mortgaging of a property by the banks/farmers. Use of these automated records will help farmers in obtaining credit. Plants Breeders Rights Registry is being established to register new high quality seeds. This is aimed at increasing crop yields in the country.
Cheap electricity for agri-tube wells: The government will continue provision of subsidised tariff on agri-tube wells at the rate of Rs.5.35 per unit in FY 2017-18. This is estimated to cost around Rs.27 billion in FY 2017-18. Production Index Units will be increased from Rs.4,000 to Rs.5,000. This will facilitate farmers to obtain maximum credit from the banks. Agriculture Tax Relief Measures: i. Combined harvesters: There is a growing trend of using combined harvesters. However, the combined harvesters currently being imported are 20 - 30 years old and are almost junk. As a result, the harvesting losses can be as high as 10%. In order to reduce these losses, it has been decided to encourage the import of newer agriculture machinery. Accordingly, it has been decided to reduce the customs duty and sales tax at import stage to 0% 5 years on new and up to 5 years old combined harvesters machinery.
Removal of GST on imported sunflower and canola hybrid seeds- GST on imported sunflower and canola hybrid seeds is being removed. Reduction of sales tax rate on imported machinery for poultry- Sales tax rate from 17% to 7% on certain imported machinery/equipment for poultry is being made. Sales tax on import and local supply of agricultural diesel engines between 3 to 36 Horse Power for tube-wells currently having rate of 17% is proposed to be exempted.
Export Promotion and Textile: Textile sector is the backbone of Pakistan’s economy and significantly contributes in the employment, usage of raw material, exports and economic growth. In view of its importance, the Government has provided special packages for the this sector since 2013. I would like to recapitulate some of the important measures: Mark-up rate on Long Term Financing Facility stands reduced from 11.4% to 5%; Duty free import of textile machinery is allowed; Uninterrupted supply of electricity and gas is ensured for the textile sector; Technology Up-gradation Fund (TUF) Scheme 2016-19 for the textile sector has been introduced; Prime Minister’s package for exporters was announced in January 2017 in which the centre-piece is the textile sector. The government made five export oriented sectors - including textile, leather, sports goods, surgical goods and carpets - as part of zero-rated sales tax regime last year. This will continue during the next financial year.
Similarly duty free import of textile machinery will continue. All the measures announced in FY 2016-17 will be continued in FY 2017-18. Maintaining our past tradition of supporting the textile sector, following measures are proposed in the FY 2017-18: To stabilise cotton prices in the country, a system of cotton hedge trading for the domestic cotton will be initiated in consultation with stakeholders; In consultation with public and private stakeholders, the government will launch Brand Development fund for textile sector; The approval process of establishment of 1,000 stitching units has been completed and its implementation will start during FY 2017-18 and shall be completed in three years; Textile Ministry will launch the first ever online textile business/trade portal for textiles using B2B (business to business) and B2C (business to consumer) mode. This will bring Pakistan textiles’ value chain in line with global marketing practices. Pakistan’s exports have suffered due to slow-down in global trade and reduction in commodity prices. To increase exports, the government implemented a number of initiatives which will also continue for the next year: Mark-up rates of Export Refinance Facility have been reduced from 9.5% in June 2013 to 3% in July 2016. In addition, the mark-up rate on Long Term Finance Facility has been gradually reduced from 11.4% in June 2013 to 6% in 2015. These initiatives have resulted in reduction of input costs for exporters.
In addition, new initiatives are as follows; The custom duty on raw-hides and skins will be reduced to zero; Stamping foil used in producing high value added finished leather will also be exempted from customs duty; Rice exporters are facing difficulties in marketing due to long distances from their potential market. In order to facilitate the export of rice, it is being decided in principle to allow warehousing of rice outside Pakistan. Ministry of Commerce, State Bank and Rice Export Association of Pakistan will develop details of this scheme.
Housing Sector: There is over 1 million shortage of housing units in the country. Every year an additional demand of 300,000 units is being added to this gap. Availability of long-term financing is a major hurdle. The banks are shy of offering long-term financing. In order to overcome this hurdle to housing loans, Risk Sharing Guarantee Scheme for low-income housing will be launched. Under this scheme, the Government will provide 40 percent credit guarantee cover to Banks and DFIs for home financing for up to Rs.1 million. Rs.6 billion have been allocated for this purpose. It has been decided that this facility will also be made available through micro-finance banks. To fulfil the needs of infrastructure, the government has increased development spending on permanent basis. The government has consistently increased its development spending to match the financing needs of infrastructure sector. In addition to financing for public sector infrastructure the government is also facilitating private sector investment and finance in infrastructure through a range of policy instruments and regulations. These include a Public Private Partnership framework, new prudential regulations for infrastructure finance and development of new institutions and instruments.
Pakistan Development Fund (PDF) has been created which will be made fully operational soon. PDF will provide long-term infrastructure financing for commercially viable public sector and PPP projects. The international development partners have expressed their interest to provide further support through PDF; Pakistan Infrastructure Bank (PIB): Pakistan Infrastructure Bank (PIB) will also be established to provide infrastructure financing for commercially viable private sector projects. This effort will be spearheaded by the IFC with a 20% equity of the Government through PDF, while the remaining share will be private sector. The Bank is expected to assist in introducing innovative project financing tools such as building domestic infrastructure bond market and creating contingent financing products which include credit guarantees, credit default swaps, foreign currency liquidity facility and refinancing options; Public Private Partnership Act: The PPP authority bill has been enacted by the Parliament recently. This Act provides a regulatory framework for promotion of financing public-private-partnership projects in the country. This will also cater to the requirement of viability gap funding of large sized public sector projects.
In recent years, our financial sector has demonstrated good performance. To further strengthen the financial sector in the country following
