The persistent downturn of economy has been adversely affecting the insurance
sector. Gross underwritten premium has been on the decline. Cover story discusses the
performance of the sector and issues being faced by the industry through interviews of
CEOs of some of the leading companies. It covers performance of insurance sector during
1998, impact of downturn of economy, persistent bearish trend in capital market, law and
order situation and possible implications of proposed Insurance Act.
CIGARETTE
An agreement, signed between the Central Board of
Revenue (CBR) and six Mardan-based cigarette manufacturers to pay a fixed monthly tax, is
deemed discriminatory against two other major local manufacturers. The question is: Can
there be two sets of taxation laws for the same industry and wouldn't the agreement
undermine the fairplay at the cost of the two biggest manufacturers who contributed over
Rs 17 billion in taxes and duties to the exchequer last year?
CAPTIVE
PLANTS
The ban on captive power plants, proposed by the
Water and Power Development Authority (WAPDA) is contradictory to the government's policy
of the privatization of power sector programme in Pakistan. The government has already
divided WAPDA into various power companies to accelerate the pace of privatization while
the KESC, another major power generating corporation, has already been placed on top of
the privatization plan.
APPLE
Pakistan Industrial Development Corporation
(PIDC), in collaboration with the private sector, has chalked out a plan to boost apple
exports. Pakistan produces over 500,000 tonnes of good quality apples, however, the bulk
producer is Balochistan which alone produces over 400,000 tonnes. The processing plant
being set up in Balochistan is expected to help increase apple exports.
