ISLAMABAD, Feb 25: The Economic Coordination Committee of the Cabinet (ECC) here on Tuesday decided to allow Wapda to issue bonds worth Rs7 billion, and granted permission to traders to import furnace oil.
The meeting also discussed wheat support price policy and decided that an effective mechanism should be evolved to synchronise policy structure of wheat to proportionately pass on benefit to growers and other stakeholders.
It was decided that the government would provide credit, fix deadline for procurement as well as make adequate storage facilities to ensure that the quality of procured wheat remains intact. Provincial governments and PASSCO would ensure that the grower gets the Rs300 per 40 kg as decided earlier by the cabinet.
The ECC, which was presided over by Prime Minister’s Adviser on Finance Shaukat Aziz, also directed the Ministry of Food and Agriculture to encourage export of wheat through a strategy to be worked out by Committee on wheat exports.
Similarly, the ECC directed the government of Balochistan to present a strategy to protect onion growers so that appropriate steps could be taken to help onion farmers in Balochistan.
According to an official announcement, the meeting also approved issuance of 10th WAPDA bonds amounting Rs7 billion.
The five-year bonds, to be guaranteed by the government of Pakistan, will be issued in the denomination of Rs100,000, 500,000 and 1 million and will be listed on the Stock Exchanges.
These bonds will be acceptable as prime collateral for purpose of bank advances.
The ECC noted with satisfaction stability in prices of essential consumers items, ample availability of stocks of wheat, sugar, fertilizer and oil. It was given a presentation on beefing up of oil stocks in view of the situation obtaining in the Middle East. The meeting was informed that stock position of various varieties of petroleum goods have been increased as a contingency measure.
The Civil Aviation Authority and PIA also briefed the meeting about their performance. The ECC directed the Civil Aviation Authority to work on National Aviation Policy for effective air networking of Pakistan with the world, as this would promote investment and tourism. It also noted improvement in efficiency of PIA and supported their future plans.
The meeting noted that equity based investment abroad by resident Pakistanis up to September 2002 had nearly touched $8 million. This investment is being undertaken by Pakistani private sector to build marketing offices to promote exports.
The ECC also allowed import of furnace oil by fuel oil traders on their own risk and cost after obtaining clearance from OCAC of the import quantity and laycan/arrival schedule. However, the importers will have to conform to the import standards as laid down by the Ministry of Petroleum.
To discourage import of explosive material, the ECC also authorized Central Board of Revenue to destroy 32599 cartons of banned explosive material stored at border posts in coordination with law enforcement agencies.
The ECC noted with satisfaction macro-economic stability in the country, satisfactory collection of revenues, an increase of around $500 million in current account balance for the first 6 months of the year as compared to the corresponding period of last year, increase in exports, imports, especially in non-oil and non-food imports, indicating increased domestic industrial activity and substantial rise in manufacturing sector as percentage of GDP.
The governor State Bank informed the meeting that country as a result of increased remittances from export of services current accounts surplus improved by $500 million for the first six months of the year. The Current Account Balance which was $1.288 billion in the corresponding period of last year, increased to around US $1.7bn.
Similarly, the chairman CBR informed ECC that the revenues collection target during the last seven months has been met. The meeting also noted that during the seven months of the current financial year exports registered an increase of 19 per cent as compared to the corresponding period of last year.
Exports of primary commodities and textile manufacture increased by 25 per cent and 19 per cent respectively. In terms of increase in export quantity, cotton cloth registered an increase of 11 per cent, knitwear 34 per cent and towels 14 per cent over the corresponding period of last year.
So far, Pakistan has achieved 60 per cent of annual export target. It indicated that Pakistan would exceed the target of $11.4 billion by the end of current financial year.
Similarly, imports registered an increase of 20 per cent over the corresponding period of last year. The ECC noted with satisfaction that non-oil non-food imports increased by 22 per cent, machinery by 42 per cent thereby indicating increased industrial activity in the country.
Impact of reforms on manufacturing of goods and their exports abroad was also discussed threadbare. The meeting noted that manufacturing sector which registered a growth of 4.40 per cent in 2001-02 has, in seven months of the current financial year, registered a growth of 7.02 per cent. Share of manufacturing in GDP increased from 16.70 per cent in the year 1999-00 to 18.20 per cent in seven months of the current financial year.
Likewise, exports of engineering goods from July to December registered a substantial increase as compared to the corresponding period of the last year. The exports of electric fans increased by 43 per cent, transport equipment 20 per cent, electrical machinery 30 per cent, steel pipes 127 per cent and other machinery 227 per cent.
The meeting among others was attended by the ministers of industries, railways, food and agriculture, information technology, governor, State Bank, deputy chairman, Planning Commission, chairman, BOI and federal secretaries of respective ministries.