ISLAMABAD, Dec 25: The finance and the commerce ministries are at loggerhead over utilisation of funds for strategic interventions, viz-a-viz promotion of domestic commerce and accelerating exports, it is learnt.
While the commerce ministry sought an amount of Rs26.14 billion for promotion of trade initiatives, the finance ministry suggested an amount of Rs10 billion for the next three years on trade promotion initiatives, to be announced as part of the strategic trade policy framework (STPF) 2012-15.
The commerce ministry had originally demanded Rs60 billion, but the amount was reduced to Rs26.14 billion on the intervention of the finance minister and the deputy chairman of Planning Commission.
For the first year, the commerce ministry sought funding of Rs5 billion, but the finance ministry wanted it to be restricted to Rs2 billion for the year 2012-13.
The commerce ministry identified 26 sectors for cash interventions during the years 2012-13, 2013-14, and 2014-15 which have now been reduced to 14 owing to resource constraints.
The announcement of the policy has already been delayed because of differences on allocation of funds since August 2012.
An official source said that a final decision on finance-related issues would be taken up in the cabinet meeting.
Prime Minister Raja Pervez Ashraf has already approved trade policy for submission to the cabinet for a formal approval.
The commerce ministry in its proposals suggested to mark-up rate support of two per cent be provided on prevailing LTFF for future import/purchase of machinery.
An amount of Rs500 million was proposed for this scheme to be implemented in the year 2012-13.
The total amount to be spent under this account in three years was projected at Rs3 billion.
For the creation of Exim Bank, an amount of Rs5 billion was proposed.
It was proposed that mark-up rate support of 1.5 per cent be provided on export finance scheme (EFS) to selected sector exporters at a cost of Rs1.250 billion in the next three years.
For the year 2012-13, an amount of Rs200 million was proposed. The sectors for EFS support are: fish and fish preparations, fruits, vegetables, spices, meat and meat preparations, carpets and rugs, sports goods, footwear, leather products, surgicalgoods, cutlery, onyx products, pharmaceuticals, electric fans, transport equipments, electrical machinery, specialised machinery, furniture, handicrafts and computer related services.
An amount of Rs14 billion was projected to be given as ad hoc relief at the rate of three per cent of FOB to offset the impact of higher cost of utilities for Pakistani exporters in selected sectors.
For 2012-13, an amount of Rs3 billion was projected.
An amount of Rs2 billion was proposed for marketing development assistance for regional countries in three years. Of these, an amount of Rs125 million will be spent in 2012-13.
As per three-year proposals, an amount of Rs25 million has been proposed for export promotion campaigns for agro-processed products; Rs400 million for encouraging opening of retail outlets, Rs400 million for subsidising 50 percent cost of plant and machinery for establishing processing plants for meat, fruits, vegetables, dates and olives in Azad Jammu and Kashmir, Balochistan, Gilgit Baltistan and Khyber Pakhtunkhwa.
An amount of Rs30 million has been proposed for upgradation of rice inspection laboratories, Rs20 million for mark-up subsidy at the rate of 100pc of their prevailing mark-up rate for establishing mining and processing in Khyber Pakhtunkhwa and Balochistan.
The ministry proposed an amount of Rs20 million for strengthening women chamber of commerce and industry, Rs32 million for establishment of resource management cell at the ministry of commerce, Rs28 million for establishment of leather export promotion council and Rs70 million for establishment of services export development council.