Banks accused of neglecting Balochistan mining sector: Credit facilities
By Our Special Correspondent
QUETTA, June 21: Balochistan Finance Minister Syed Ahsan Shah blamed the commercial banks of ignoring credit needs of his province, particularly of the mining sector, and, hence, announced the need for setting up of a Balochistan bank in his budget speech on Friday.
In his post-budget press conference on Saturday, the finance minister said on the authority of a survey carried out a few years ago that bulk of the fixed deposits in the commercial banks was contributed by the people from two provinces — the NWFP and Balochistan.
“But all the big commercial banks make generous advances in Karachi, Lahore and Faisalabad but hardly any loan is given in Balochistan,” he remarked, and pointed out that the NWFP and Punjab had set up their respective banks and, therefore, his government also wanted to set up a similar financial institution.
Mining was one of the main economic activities in Balochistan which was at present being ignored by the big commercial banks, he said, adding: “It will get a boost after Balochistan Bank is set up and start providing funds to the miners.”
The Balochistan finance minister was assisted by Additional Chief Secretary Planning and Development Major Nadir Khan (retired) and Finance Secretary Ahmad Zahid Mahmood.
Syed Ahsan Shah was unhappy over the falling revenues from Balochistan’s share in the gas development surcharge and did not mince words to express doubts on the collection figures of the federal government. “We want Balochistan government’s representation in the system that monitors gas production at the well heads,” he demanded.
The two public sector gas companies provide province-wise well-head production figures of the natural gas on the basis of which the federal government remit to each province its share of gas development surcharge as direct transfer.
“The straight transfers have dropped from Rs10.20 billion in the budget estimate of 2002-03 to Rs8.12 billion for next year,” he told the newsmen.
He explained that major reduction was in the receipt of gas development surcharge which was due to lesser gas from Balochistan in the overall quantity of gas injected in the system.
He said his government had filed a claim of Rs6 billion arrears in respect of gas development surcharge from the federal government against which it had received only Rs80 million, so far.
Balochistan was being given the share at the rate of Rs26 for 1,000 cubic feet of gas whereas the market price of the gas was Rs126 for the same quantity, he said, and added: “We have raised this issue with the federal government.”
The finance minister was confident that the federal government would facilitate the disbursement of $100 million Asian Development Bank loan. He said the ADB loan carried an interest rate of 2.5 per cent and, therefore, Rs3 billion from this loan amount would be utilised to retire expensive loans of the federal government. It would benefit the province to the tune of an yearly saving of Rs150 to Rs160 million now being spent on servicing of and interest on the loans, he added.
He justified the setting up of Balochistan Constabulary which would recruit 10,000 personnel, all locals, for which the federal government would provide funds. The constabulary would replace the Frontier Constabulary in the province.
Responding to a question, the finance secretary said funds to the district governments were being transferred on regular basis as soon as the province was getting fund from federal government.
The finance minister said the size of next year’s budget was Rs34.33 billion. It showed current revenue expenditure at Rs23.53 billion, incorporating an impact of Rs1.5 billion from 15 per cent increase in salaries of the government employees and Rs9.30 billion development programme.
Syed Ahsan Shah listed four factors which had cut down revenue income of the province.
The first was the falling revenue from oil and gas; the second was a reduction in population ratio of the province because some parts of the population stayed away from the census carried out in 1998, bringing down Balochistan’s population ratio to 5.1 per cent from 5.3 per cent; the third was a drop in the federal grants and the fourth was a rise in the expenditure.
The Balochistan finance minister agreed with a questioner that Rs1 billion subsidy given on wheat did not benefit the consumers.
