LAHORE  -  Under utilisation of Export Development Fund (EDF) is hitting the exports hard therefore a new mechanism should be put in place to ensure its proper spending.

This was observed in a report on ‘Proper Utilisation of Export Development Fund’ prepared by the Policy Research Institute of Market Economy (PRIME) with the support of Centre for International Private Enterprise.

According to the presentation, the Federal Cabinet in the year 1999 decided that an Export Development Surcharge (EDS) equivalent to 0.25% of the export value of all exports may be levied with effect from lst July, 1991 and that the proceeds of the Surcharge should be transferred by the Government to the Export Development Fund (EDF) for distribution amongst the various export associations for export development.

The presentation further said that the receipts of EDS during 2011-12 were Rs. 5,807.045 million. Against the said receipts, the Finance Division has allocated funds for 2012-13 Rs. 1,508.731 million only.

Thus, there is short provision of Rs.3, 578.314 million.  The total short provision since amendment in the Act in 2005 i.e., from 2006-07 to 2012-13, has accumulated to Rs15, 060.450 million, the money

accumulated but never transferred to the Ministry of Commerce. It revealed that lack of evaluation system has caused misallocation of funds towards the projects which fail to boost exports. For most of the projects, the proposals largely seek administrative support. Approximately 80-90 per cent of the project budget goes to salaries and administrative cost. LCCI President Frooq Iftikhar addressing the launching ceremony of the report observed that the proceeds from the Export Development Fund (EDF) should be spent only on the private sector-led projects for enhancing the exports of the country. He also called for increase and to simplify the access of the fund to business community through transparent mechanism.

He recommended to allocate the funds on implementing compliance protocols for various process oriented industries.

The LCCI president said that Trade offices and warehouses abroad should be strengthened for the promotion of Pakistan’s exports. Export centres should also be established in Africa and Middle East which may serve as the showcase of Pakistan’s exports. Former Senior Vice President Sheikh Muhmmad Arshad said that there should be some single authority to decide about the allocation as the existing methodology is complicated.

Former Senior Vice President Tahir Javaid Malik called for abolition of Export Development Fund because of lengthy and complex procedures involved in the issuance of the funds.