ISLAMABAD, Jan 12: The Economic Coordination Committee of the Cabinet (ECC) here on Saturday decided to set up a committee to regulate and coordinate the export of wheat, flour, suji and bran.
The committee, to be headed by the minister for privatization, will include representatives of ministries of commerce, food and agriculture, finance, SAFRON, PASSCO and TCP.
The committee has been mandated to export wheat through the private sector. It would work to dispose of wheat stock at market price and report to the ECC.
To encourage export of wheat on international standards, the ECC approved establishment of grain storage and handling facilities at ports and upcountry in private sector. The facilities include encouragement of setting up of storage facilities by the private sector including silos on (BOO) basis; credit availability at mark-up as available for agriculture sector; 100 per cent foreign equity; remittances of capital, profits and 5 per cent customs duty on plant, machinery and equipment (PME) under a separate PCT heading with effect from next budget. For interim period, alternative mechanism will be evolved by CBR with tax relief/first year allowance (FYA) @ 75 per cent of PME cost
The ECC, presided over by Finance Minister Shaukat Aziz, was satisfied with stability in prices of essential items and comfortable stocks of wheat, sugar, fertilizer and oil.
The meeting noted that macroeconomic indicators were satisfactory. Foreign exchange reserves were close to $5 billion, economic activity was normal, reforms continued uninterrupted, liquidity was ample, business was proceeding normally and the stock position was satisfactory. It was also noted that most foreign airlines had resumed or were planning to resume their normal flights.
“The nation is ready to face any eventuality with confidence and no resources will be spared for defence of the country,” the finance minister said, according to a handout issued by the ministry of finance. The ECC noted that as a result of deregulation of wheat prices, the prices of flour in NWFP and Balochistan registered a decrease. As compared to the countries of South Asia the prices of essential items in Pakistan were competitive. In Pakistan prices of petroleum, basmati rices and pulses were lowest in the region. The ECC was informed that in the first 6 months, CBR paid Rs37.7 billion as refund of sales tax and customs duty as compared to Rs23.3 billion in the corresponding period last year. The difference of Rs14.5 billion indicates increase of 63 per cent.
The finance minister instructed the CBR to clear the backlog of refunds by end of January. This would provide much needed liquidity to exporters. From February onwards the refund backlog will be cleared except for curbing refund applications.
The ECC approved a model crude oil sale and purchase agreement submitted by the ministry of petroleum. The agreement provides standard framework to execute the sale and purchase deeds of crude oil.
The meeting among other was attended by ministers for commerce, agriculture, labour and manpower, privatization, advisor to the Chief Executive on Agriculture, chairman, Board of Investment, secretary general, Finance and federal secretaries.