ISLAMABAD, March 3: The Economic Coordination Committee (ECC) of the cabinet ordered on Tuesday immediate import of 25,000 tons of sugar as its price crossed Rs45 a kg in some parts of the country.

Adviser to Prime Minister on Finance Shaukat Tarin, who presided over the ECC meeting, said that with imports and increased supplies to the Utility Stores Corporation (USC), the government would bring down the price to around Rs38 a kg.

Inflationary pressures were likely to ease in a few months owing to a sharp decline in prices of petroleum products and palm oil, the ECC was informed.

The ECC asked the Ministry of Food and Agriculture to set up crop monitoring and assessment cells and prepare chances about production and procurement based on tangible forecasts about surpluses or shortages.

The agriculture ministry was asked to carry out necessary home work for providing 20,000 tractors to farmers at subsidised rates under the Benazir Tractor Scheme.

Under the scheme, to be implemented through the Zarai Taraqiati Bank (ZTBL), the government will share up to 50 per cent of the cost, subject to a maximum of Rs200,000 per beneficiary. The tractors would be distributed among provinces on the basis of population.

The government will provide Rs4billion for the scheme and the remaining Rs6billion will be paid by beneficiaries.

The ECC formed a committee headed by State Bank governor Saleem Raza to prepare proposals for a new policy allowing the federal government to charge a reasonable interest rate while re-lending to provinces and state-owned entities and corporations loans taken from foreign countries and international financial institutions.

The committee will resubmit a consolidated package, taking into account provincial governments’ concerns related to exchange rate/risk.

Two state-run financial institutions, including the National Bank of Pakistan, had become guarantors of some foreign loans taken by three private companies. Now, the three companies are said to be unable to pay back their loans.

The ECC approved a proposal under which the size of foreign loans taken by private companies would be converted into local currency at the exchange rate as on Sept 30, 2008, and loan re-payment would be rescheduled for all private sector borrows. It will be effective after the signing of Subsidiary Loan Agreements (SLAs).

The ECC reviewed key economic indicators (KEI) and the overall price situation in the country and noted that overall consumer price index (CPI) based inflation had registered a deceleration by 2.8 per cent in January 2009 over December 2008.

Forex reserves during January 2009 stood at $10.138 billion that included the impact of International Monitory Funds (IMF)’s first tranche and other positive inflows.

Overall workers’ remittances during the first half of the current financial year (July-December 2008) amounted to $4.277 billion, showing an increase of 18.0 per cent. The committee was informed that the Federal Bureau of Revenue had collected Rs702.5 billion during first eight months of the fiscal year (July 2008-February 2009), posting an increase of 20 per cent over the corresponding period of last year. The Foreign Direct Investment during (July08-January09) amounted to $2587.7 million, registering a growth of 1.3 per cent.

The meeting was informed that due to fresh fiscal management measures KIBOR (Karachi Interbank Offered Rate) had come down from 16 per cent to 12 per cent that would help strengthen industrial units to meet domestic commodity.

This year’s wheat procurement target has been fixed at 6.55 million tons. The government has decided to import 2.5 million tons of wheat in phases this year to augment domestic wheat supplies. The Trading Corporation of Pakistan (TCP) has so far imported 1.84 million tons and the remaining import is in the pipeline. It noted that the existing sugar stock was reported to be around 1.537 million tons to supplement open market needs.

The ECC noted that 78 per cent of planned quantity of urea (745,000 million tons) had arrived, whereas 22 per cent was due to arrive at ports.

While considering the proposal of the Ministry of Livestock and Dairy Development to allow to monitor export of live animals as per the export policy 2008-09 which allows the export as per already settled procedures and conditions, the ECC asked that export procedures be simplified and all necessary measures like quarantine and health check be taken along with registration of export contracts.
Tags: