ECC okays issuance of 10th Wapda bonds

ISLAMABAD (February 26 2003) : The Economic Co-ordination Committee of the Cabinet (ECC) Tuesday approved issuance of Rs 7 billion 10th Wapda bonds to bridge the local component of Ghazi Barotha Hydropower Project (GBHP).

The five-year bonds, to be guaranteed by the Government of Pakistan, would be issued in the denomination of Rs 100,000, 500,000 and 1,000,000 and listed on the stock exchanges.

These bonds will be acceptable as prime collateral for purpose of bank advances.

The ECC, which met under the chairmanship of Prime Minister's Adviser on Finance Shaukat Aziz, discussed wheat support price policy and decided that an effective mechanism should be evolved to synchronise policy structure of wheat to proportionately pass on the benefit to the growers and other stakeholders.

The government would provide credit, deadline would be fixed for procurement as well as adequate storage would be arranged to ensure that the quality of procured wheat remained intact and provincial governments and Pasco ensure that the grower gets Rs 300 per maund as decided earlier by the Cabinet.

The ECC also directed the Food and Agriculture Ministry to encourage export of wheat through a strategy to be worked out by the committee on wheat exports.

Similarly, the ECC directed Balochistan to present a strategy to protect onion growers so that appropriate steps could be taken to help onion farmers.

The meeting was given a presentation on beefing up of oil stocks in view of the situation obtaining in the Middle East.

It was informed that the stock position of various varieties of petroleum goods has been increased as a contingency measure.

The Civil Aviation Authority (CAA) and the Pakistan International Airlines (PIA) also briefed the meeting about their performance.

The ECC directed the CAA to work on the 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 the PIA and supported their future plans.

The meeting also 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 the import of furnace oil by fuel oil traders on their own risk and cost after obtaining clearance from the OCAC of the import quantity and laycan/arrival schedule.

However, the importers will have to confirm to the import standards as laid down by the Petroleum Ministry.

To discourage import of explosive material, the ECC also authorised the Central Board of Revenue (CBR) to destroy 32,599 cartons of banned explosive material stored at the border posts in co-ordination with the law-enforcement agencies.

The ECC noted with satisfaction macroeconomic stability in the country, satisfactory collection of revenues, an increase of around $ 500 million in current account balance for the first six months of the year as compared to the corresponding period of the 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 the GDP.

State Bank Governor Ishrat Husain informed the meeting that the country following increased remittances from the export of surplus service current accounts 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 the last year, increased to around $ 1.7 billion.

Similarly, Board of Revenue (BoR) chairman informed the 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 percent as compared to the corresponding period of the last year.

Exports of primary commodities and textile manufacture increased by 25 percent and 19 percent respectively.

In terms of increase in export quantity, cotton cloth registered an increase of 11 percent, knitwear 34 percent and towels 14 percent over the corresponding period of the last year.

So far, Pakistan has achieved 60 percent of the annual export target.

It indicated that Pakistan would exceed the target of $ 11 billion by the end of the current financial year.

Similarly, imports had registered an increase of 20 percent over the corresponding period of the last year.

The meeting also noted with satisfaction that non-oil non-food imports have increased by 22 percent, machinery by 42 percent, thereby, indicating increased industrial activity in the country.

The impact of reforms on manufacturing of goods and their exports abroad was also discussed threadbare.

It noted that the manufacturing sector, which registered a growth of 4.40 percent in 2001-02, has in seven months of the current financial year registered a growth of 7.02 percent.

Share of manufacturing in GDP increased from 16.70 percent in 1999-2000 to 18.20 percent in the first seven months of the current financial year.

Similarly, exports of engineering goods from July to December have registered a substantial increase as compared to the corresponding period of the last year.

The exports of electric fans increased by 43 percent, transport equipment 20 percent, electrical machinery 30 percent, steel pipes 127 percent and other machinery 227 percent.

The meeting noted with satisfaction stability in prices of essential consumer items, ample availability of stocks of wheat, sugar, fertiliser and oil.

Among others the meeting was attended by the ministers of industries, railways, food and agriculture, information technology, State Bank governor, Planning Commission deputy chairman, Board of Investment (BoI) chairman and federal secretaries of the respective ministries.

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