ISLAMABAD, Jan 5: The government is finalizing a draft of the new industrial policy that seeks to reduce power and gas tariffs with a view to promoting local and foreign investment.

A senior official of the Ministry of Finance told Dawn that the draft of the new industrial policy was likely to be finalized within this month after which it will be placed before the cabinet for approval.

He said there existed complaints that the cost of doing business in Pakistan was still high and the issue was now being looked into thoroughly. The official said that there were roughly 50-60 acts and ordinances that were expected to be reduced to 5-10 in the new industrial policy.

The purpose, he pointed out, was to ensure reduced tariffs particularly for electricity and gas by having further de-regulation. The new industrial policy, the official said, would offer all possible fiscal and non fiscal incentives to the private sector to set up new power plants.

He said 150 mw power plant has been set up at Sundarband Estate, near Lahore by the private sector which should be an incentive for others to follow. The current transmission and distribution losses of Wapda could end if the private sector set up its own power plants and bring the number of losses to 2 per cent, he added.

"The National Reconstruction Bureau (NRB) has been given a special assignment to help remove hurdles that are blocking investment," the official said adding that NRB would propose modernization of laws so that the cost of doing business could be reduced significantly.

The prime minister, he said, has instructed the economic ministries to harness efforts so as to introduce some "very effective new industrial policy" that should remain intact for a number of years.

The official said that NRB would also propose measures to help strengthen infrastructure facilities to be offered to the private sector under the new industrial policy.

The draft of the industrial policy, he said, has proposed the setting up of new "industrial parks" which will offer reduced tariffs and taxes in order to promote industrialization.

These industrial parks, the official said, will be established in all the four provinces for which provincial governments would also be extending all possible support to the investors.

"We need to offer internationally competitive tariffs to the investors and hopefully this aspect will be adequately covered in new industrial policy," the official assured.

He pointed out that the government certainly wanted to increase genuine tax revenues but without intimidating the local and foreign investors. The official pointed out that since the new World Trade Organization (WTO) regime has been enforced from January 2005, the name of the game was competition and those who would fail to compete would be left behind.

"That is why the whole exercise is to make our private sector more competitive for which we on our part are trying to offer some innovative new industrial policy," the official said.

He said that commercial banks were offering adequate credit facilities to the private sector and that Pakistani businessmen now have more access to foreign loans. The new industrial policy, he said, would help Pakistan to become "five fastest growing countries in the world" that will eventually help extend new jobs to the people.

"And this is how the government plans to put dent on poverty," he said adding that development of better infrastructure and removing constraints in the promotion of human resource development were some of the major goals of the government. Through the new industrial policy, the official said, the government wanted to make Pakistan a major manufacturing and trading country in the world.

"We have to create a conducive environment for foreign investment along with providing necessary security to the investors", the official said adding that a number of functions of the government were expected to be "out sourced" in the new industrial policy. Pakistan, he said, needed to achieve 8 per cent GDP growth rate to deal with challenges like poverty and unemployment.