KARACHI, Jan 28: The World Bank has offered an interest-free loan of Rs3 billion to the Sindh government with a proposal to invest pension funds amounting to Rs16bn in viable projects.

The offer was made at a meeting held here on Sunday in connection with fiscal restructuring under the Sindh Reforms Programme initiated by the provincial government. The meeting was presided over by the Sindh minister of finance, planning & development, Dr Abdul Hafeez Shaikh, who was assisted by the secretary finance, Fazalur Rahman, and Shahid Kardar, consultant on the reforms programme, and Ahmed Hasan, Hanid Mukhtar and Shaheen Malik represented the World Bank.

The Sindh government has sought a 100 million US dollar loan with zero per cent mark-up to implement its reforms programme. An IBRD mission had held detailed meetings with the Sindh government in November last year, and, expressing satisfaction over the pace of work and results achieved so far, had promised that an appraisal mission would visit the province in February, and the case would be submitted before the IBRD board for approval in March this year.

The minister, in view of the IBRD offer, directed the officials to continue dialogue with the bank to seek a medium-term loan of Rs3bn for three years.

Speaking at the meeting, the minister of finance informed the IBRD team that the financial health of the provincial government was expected to improve as a result of the tax reforms introduced recently. Property tax collection had already registered a 15 per cent increase during the first half of the current financial year and was expected to increase up to 25pc by the end of the year.

Referring to federal grants, the minister told the meeting that as a result of the revised National Finance Commission Award, Sindh would get an increased share from the divisible pool. In addition to that, it would get enhanced royalties on oil and gas as two new fields had started operating in the province. Furthermore, the province would get a sizable share from the federal allocations of Rs2bn made each for education, health and the Khushhal Pakistan Program, he added.—PPI