New uplift projects opposed
The ministry of finance has opposed the initiation of new development
projects in all the four provinces during 2000-2001 due to financial difficulties.
Official sources told that the Priority Committee of the ministry of
finance had recommended that development funds in the next financial year should be
restricted to completing those projects whose 80 per cent work had been done.
Since the financial constraints were increasing, the Priority
Committee, which was meeting almost daily under the chairmanship of the Additional
Secretary Budget, Ministry of Finance, Mr Younis Khan, has also disapproved the Planning
Commission's plea to keep the size of new Public Sector Development Programme (PSDP) at Rs
116 billion. The Planning Commission pleaded that if no 10 per cent usual increase in the
new PSDP could be augmented keeping in view the rate of inflation, it should be kept at
the same level of last year i.e. Rs 116 billion.
Budget deficit revised
A joint data reconciliation exercise by the government and the IMF has
revealed a major discrepancy in the 98-99 budget deficit figure which has been revised to
about six per cent from 4.3 per cent of GDP. Official sources said, the exercise which was
in progress for the last few weeks, is one of the major obstacles in negotiating a new IMF
programme with Pakistan. Budget deficit is a key performance criterion set by donor
agencies to agree on any balance-of-payment support.
RDFC sanctions Rs3.781bn
RDFC has sanctioned financial assistance of Rs3.781 billion to 900
projects in less developed areas out of which Rs 2.970 billion was disbursed during the
last 18 months.
Addressing a press conference, Tahir Abbas, Managing Director of RDFC
said the financial condition of RDFC was not sound two years back.
Next year's PSDP estimated at Rs108bn
The government has tentatively determined at Rs 108 billion the size of
the new Public Sector Development Programme (PSDP) for 2000-2001.
According to informed sources, the government was unable to have even
10 per cent usual increase in new PSDP due to its growing financial
The size of the current year PSDP had been slashed from Rs 116 billion
to Rs 108 billion and further Rs 7 billion cut was being envisaged.
The Priority Committee has been directed to firm up the funding
requirements of the ministries and divisions for next financial year. The finance ministry
will finalize these allocatons.
The proposed Rs 108 billion size of the new PSDP was subject to
improved tax recovery by the Central Board of Revenue (CBR). As a matter of fact, the
sources said, the government has no firm basis on which it could determine the size of the
next PSDP but it was tentatively determined at Rs 108 billion.
The National Economic Council (NEC) will eventually approve the size of
the new PSDP in early April.
The sources said that the government was just unable to ensure some
increased funds in the new PSDP even for ministies of information and interior. "Both
these ministries would perhaps be given additional funds from secret funds", a source
A total of Rs 102 million has been allocated for the ministry of
information against Rs 107 million of last year. It included Rs 75 million for Pakistan
Broadcasting Corporation against 20 million of the last PSDP. It was done with a view to
help replace some of the old and ineffective equipment of the PBC. Associated Press of
Pakistan (APP) will get Rs 7 million in the new PSDP and it was being asked to go for
Sugar Mills asked for output figures
Ministry of Food and Agriculture has asked the Pakistan Sugar Mills
Association to submit final figures of sugar production 1999-2000. An official of Ministry
of Food and Agriculture said that 2.51 million tons of sugar production is estimated
against the local consurnption of 2.9 million tons.
Due to shortfall of about 4 lakh tons, the import of sugar would be
allowed in the private sector, he added and said due to lower prices in the market import
of sugar will not hit the consumer prices.
SBP chief for merger of small banks
If banks do not go for mergers on their own the State Bank may take
regulatory steps to force them to do so.
SBP Governor Dr Ishrat Husain hurled this warning though in a
subtle way while speaking as the chief guest at 49th annual general meeting of
Institute of Bankers, Pakistan.
"I hope that the market players will carry out voluntary and
mutually agreeable mergers and consolidations..." he remarked. But if this does not
happen "I am afraid the regulators will have no option but to discharge their
fiduciary responsibility through appropriate regulations."
Dr Ishrat said it is time for smaller banks to go for mergers because
"small private banks are too weak either to withstand exogenous shocks or to manage
risks prudently or to capture the market share from large established banks." He said
the financial sector required mergers and restructuring and infusion of capital and human
resources and technological upgradation to come up with fewer but stronger institutions.
Offer to tap gas reserves
The Deputy Governor, Edo State of Nigeria, Chief Mik'e Oghiadomhe and
Managing Director, Gaslinks Nigeria Ltd. Charles D. Osezua, held a meeting with SSGC's
Managing Director Mukhtar Ahmed, to explore future possibilities of cooperation with Sui
Southern Gas Company Limited.
The SSGC Chief welcoming the delegation assured of all possible
assistance in areas pertaining to gas industry which Nigeria might need in the efforts to
tap its huge gas reserves and to use the same for its economic development.
Fiat car to be launched in June
Two models of Fiat car will be launched in Pakistan by June this year,
said Raja Abdur Rehman, Chairman Raja Motors Company on Saturday.
Talking to newsmen at a local hotel, he said the Rs 670 million Fiat
car manufacturing plant set up in Pakistan has the capacity of producing 5000 cars
annually while operating in single shift.