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Plans to bring 0.513m acres under plough

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Balochistan government has decided to use additional perennial water to bring under plough another 5,13,000 acres of land to augment agriculture produce in canal irrigated areas of Nasirabad division of Balochistan.

An official spokesman said that feasibility process would soon be undertaken at an estimated cost of Rs 20 million.

He said on Thursday that there were five alternatives to make use of 2,500 MAF of water made available to Balochistan under 91 apportionment accord on Indus water and flood flows.


Sindh cuts development outlay to Rs7.910bn

Sindh's development outlay of Rs7.910 billion during 1999-2000 is smaller than the budget estimates (Rs8.710 billion) as well as revised estimates of (Rs8.278 billion) for the outgoing year, primarily due to lower federal assistance.

It has three main components: Annual Development Programme Rs4.00 billion; Tameer-e-Sindh Programme (TSP) RsO.50 billion and foreign-aided projects Rs3.41 billion.

The ADP 1999-2000 is going to be largely funded through federal assistance (Rs2.76 billion), provincial contribution (Rsl.213 billion) and Japanese grant (Rs22.5 million).

There is a sharp decline in federal assistance from original estimates at Rs3.434 billion in 1998-99 to revised estimates of Rs2.764 billion, the level at which the allocation has been made for next fiscal.

The provincial funding for ADP for 1999-2000 has been raised to Rsl213 million from the original estimates of Rs842.852 million and revised estimates of Rs 1081.8 million of the previous year. However, Japanese grant remains unchanged and is of the same size as of 1998-99 i.e. Rs22.5 million.


Dar discusses revival of sick units

Finance Minister Mohammad Ishaq Dar expressed concern at the delay in processing the cases of sick industrial units and directed the Banks/DFIs to finalize all such cases in 45 days.

The minister, who chaired a meeting here this afternoon to discuss measures for expeditious revival and restructuring of sick industrial units in the country.

It was decided in the meeting that section 296 of the companies ordinance dealing with measures for revival of sick industrial units be enforced which has been inoperative so far. In pursuance of section 296, the government would notify a high powered committee comprising of heads of Banks/DFIs to prepare packages for rehabilitation of sick industrial units. The committee would be headed by Mr. Tariq Hameed and include Mr. Shaukat Mirza and Mr.Humayun Elahi Sheikh.


ADBP to pay tractor makers after 3 months

Tractor makers will have to wait for three months to get payment on sale of units because of liquidity crunch being faced by the major creditor, Agriculture Development Bank of Pakistan (ADBP).

Industry sources said the ADBP, which used to clear the payment within a week, has informed assemblers that they would have to wait for 90 days.


Companies can get away with token dividends

An extra 10 per cent tax on the companies' excess reserves to force them to pay dividends is unlikely to benefit stock investors.

Experts said companies could still get away with paying token dividends to investors as this new measure did not set minimum limit for the dividend pay-outs.

"I think government cannot achieve its objective unless it fixes minimum limit of dividend payouts," Arif Habib, former chairman, Karachi Stock Exchange said.

He said issue was not that companies did not pay dividends, but they paid less dividends to the investors.

The measure has been announced in the federal budget to increase the cash yield of the stock markets by levying an extra 10 per cent surcharge on reserves in excess of 50 per cent of companies' paid-up capital if they fail to declare cash dividends out of profits within seven months of their year ending.

This measure would not be applicable to modarabas and scheduled banks.

According to financial results based on 1998, there were 65 companies out of total 769 listed companies whose reserves were more than 50 per cent of their paid-up capital.

But majority of these companies paid out small cash dividends or bonuses and they do not fall under this new law.

The cash-dividend yield of the Karachi Stock Exchange's 100 companies was about 10 per cent in 1998.

Stock market experts said this was not a satisfactory return keeping in view the risk attached to the Pakistani market. As compared to stock market, the return in the fixed-income securities is much higher where the risk is also much less.

"We had proposed that 50 per cent of companies distributable profits should be paid out as dividend or they should be comparable with the return on the fixed-income instruments," said Yasin Lakhani, President, Karachi Stock Exchange.

In Pakistan, usually companies having large market capitalization pay regular dividends to the investors whereas small companies run by family management have very poor dividend payout history.


 Tax holiday for EPZ expires

Investments in Export Processing Zones (EPZs) are becoming Unattractive as against other free zones of the region because several exemptions allowed to them under income tax, labour laws etc. have either lapsed or are going to expire in due course of time.

'Even existing industrial units would not enjoy these exemptions once they expire and that is going to put our investments at stake because of glaring disadvantage against other zones of the region,' director of a garment unit in Karachi Export Processing Zone (KEPZ) said.

At the time of inception of Karachi Export Processing Zone (KEPZ) in the year 1983-84, a 15 years tax holiday was given which today stands expired. If extension was not given many investors in KEPZ feel it would not only discourage new investment but would result in pulling out of the existing investment from the zone, he said.