‘Increase in price of essential commodities temporary’

Published March 4, 2020
Reza Baqir says disruption in the supply chain and devolution of rupee have caused the rise. — APP/File
Reza Baqir says disruption in the supply chain and devolution of rupee have caused the rise. — APP/File

ISLAMABAD: State Bank of Pakistan (SBP) Governor Reza Baqir on Tuesday briefed the Public Accounts Committee (PAC) on the recent increase in price of essential commodities.

He said the rise was temporary as it was a result of disruption in the supply chain and devolution of rupee.

Pointing to the growth in the large-scale manufacturing, governor said growth in big industry output has resumed and the inflation is likely to reduce in the near future. The International Monetary Fund (IMF) is facilitating Pakistan in economic reforms.

Governor informed the PAC that the country’s foreign exchange reserves are improving, and its gradual increase would stabilise the economy as well as the market.

He disclosed that a sum of $3 billion has been invested in Pakistan as ‘hot money’ from the US, UK and UAE. In response to the question of Khawaja Asif, Baqir replied that ‘hot money’ is not a new phenomenon; similar investments been made in the country to maximise interest or capital gain.

The investors make investments in stocks or bonds. It is common in other countries as well and Pakistan is not an exception.

Briefing the committee on inflation, SBP governor said the inflation rate is likely to remain in between 11-12.5 per cent during the current fiscal year.

He said that Pakistan is getting more export orders due to coronavirus in China, however, the supply of commodities from China also affected due to the said reason.

FBR’s briefing

Federal Board of Revenue (FBR) Acting Chairperson Nosheen Javed Amjad informed the PAC that about one million taxpayers have been added in the tax net; however, the FBR could collect only Rs4bn from them.

She said that a shortfall of Rs500bn is expected due to decrease in the export of goods as it stood to Rs307bn during first seven months of the current fiscal year.

However, during the current fiscal year, Amjad said the revenue collection would be Rs800bn short of budget target. Taxable exports also decreased to 22pc, she said adding the FBR has collected 96pc of its targeted revenue till end of February.

According to her, the revenue target for this current fiscal year was Rs5,555bn however after the consultation with the IMF it was reduced to Rs5,238bn.

Grand Hyatt lease

PAC chairman Rana Tanvir Hussain asked the Capital Development Authority (CDA) chairman to settle the dispute related to lease of plot allotted to Ms BNP for the construction of Grand Hyatt hotel.

Ahmed told the committee that the Supreme Court had directed Ms BNP to pay Rs2bn to the civic agency and furnish bank guarantee of the same amount. He said that the developer is reluctant to pay the funds to the CDA.

Hussain inquired regarding the action taken by the CDA against its own employees involved in extending undue benefits to the private developer.

CDA chairman informed the committee that the officials who relaxed certain prerequisites for Ms BNP were not CDA employees as most of them were senior bureaucrats of the District Management Group (DMG).

As per an initial inquiry, ex CDA chairman Kamran Lashari, incumbent Railways Secretary Habibur Rehman Gillani who was the director estate of the CDA at the relevant time, former member planning retired Brig Nusrat, former member finance Kamran Qureshi, former member administration Shaukat Mohammad and former member engineering Moin Kakakhel, additional legal adviser Rai Nawaz Kharal, and former project management director Dr Faisal Awan were all nominated as accused in this case.

Published in Dawn, March 4th, 2020

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