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Jun 12 - 18, 2000

Rsl20.5bn PSDP approved

The National Economic Council (NEC) approved on Wednesday Rs 120.5 billion Public Sector Development Programme (PSDP) for 2000-2001.

The NEC meeting was presided over by Chief Executive General Pervez Musharraf. Governors of the four provinces, some federal ministers and provincial ministers for finances also attended the meeting.

The meeting also decided to devolve administrative and financial powers on the provinces so that they can take important decisions without getting Centre's approval.

Briefing reporters after the meeting, Secretary General Ministry of Finance Moeen Afzal said that the NEC approved 19 per cent increase in the PSDP. He agreed that this was Rs 4.5 billion less than what was approved earlier by the Annual Plan Coordination Committee (APCC).

He said the meeting discussed the prevailing economic situation in the country and expressed satisfaction over it.

The growth rate for the current financial year, he said, has been estimated at 4.5 per cent against the 3.1 per cent of the 1998-1999. He said the GDP growth rate has improved due to bumper wheat crop. He said over one million tons of wheat will be exported which will bring in about $150 million.

The inflation rate, he said, has been registered at 3.4 per cent as against 6.1 per cent of last year.

He said exports registered an increase of about 10 per cent while imports were estimated to be 11 per cent more.

Mr Moeen Afzal told a reporter that rice crop was also very good and it was estimated to be 5.15 million metric ton. Similarly he said there will be 11.2 million of cotton bales as against 8.8 million bales of last year.

35pc increase in cotton output

During current season (1999-2000) the country has produced 9.749 million bales of cotton showing an impressive increase of 34.99 per cent over previous year's output of 7.222 million bales.

According to final production figures released by Pakistan Cotton Ginners' Association (PCGA) on Monday, there is a remarkable rise in production of cotton in both the cotton growing provinces—Sindh and Punjab.

The favourable climatic conditions with no virus and pest attacks this season helped the country to harvest a bumper cotton crop which otherwise for the last four consecutive seasons was suffering because of such factors.

The output in Punjab made a quantum leap to 7.602 million bales showing an increase of 36.90 per cent over previous year's production of 5.553 million bales. The province of Sindh also made an impressive rise at 2.147 million bales or 28.66 per cent higher over the previous year's production of 1.669 million bales.

Spinners keep to sidelines

Trading activity on the cotton market on Wednesday remained relatively slow as spinners adhered to the sidelines owing to liquidity problems.

Floor brokers said that owing to continued strike by retailers the sales of cotton yarn have fallen to a lowest ebb creating financial problems for most of the spinners.

"The unsold stocks in the mills are piling as ready offtake by the brokerage houses has stopped for the last about 10 days", said a leading spinner adding, "payments from the wholesalers are also held up because of the strike".

Most of the spinners are facing the problem of liquidity on the one hand and piling of unsold stock on the other and are awaiting the end of the strike by the small traders before resuming buying operations and until then the activity may remain insipid, they added.

Industries curtailing output

A segment of industries has started cutting on production due to piling up of stocks and suspension of supplies to the markets which have been closed since last eight days.

"Around 20-30 per cent of industries have started slowing down their production due to adverse situation in the wake on-going traders-government row over the tax survey," chairman, Council of Karachi Industries Association (CKIA), Farooq Bakalay told.

Industries are also facing problems in getting raw materials like chemicals, packing materials, etc from the markets, he added

Ghee mills hit by high tariff

Pakistan Vanaspati Manufacturers Association has warned that the ghee industry has been hit by high tariff rate on raw materials.

Acting PVMA chairman, Dr Salim Malik said here in a press release Wednesday that three major ghee manufacturing units have already suspended operation mainly due to duty-free import of commercial oilseeds, frequent increase in duty/taxes within a year on import of edible oils as well as discriminatory duties on soft oils import.

He argued that the liquidity position of ghee units has been adversely affected by increased duty/tax rates and a colossal loss of Rs 20 billion has been incurred by these units, collectively.

Oil, gas accords signed

Pakistan signed on Saturday two concession agreements for the exploration of oil and gas in Sindh and Southern Punjab.

The contracts were awarded to OMV (Pakistan), a subsidiary of CMVAktiengesellschaft (Austria)) and the Government Holdings for undertaking joint oil and gas exploration activities in Gambat Block No. 2658-4 covering 6518 sq kms in Sukkur, Khanpur and Nawabshah districts (Sindh) and Yazman Block No. 2871-6 covering 5865 sq kms in Bahawalpur, Lodhran and Mailsi districts (Punjab). Joint operating accords were also signed between the parties.

In another agreement, Pakistan Petroleum Ltd and British Bomeo Exploration Ltd. a subsidiary of Eni Group (Italy), secured transfer of 30% each working interest from OMV in Gambat Block. The joint ventures are likely to carry out 300 line km of seismic survey and drilling of two wells during the term of three years with a minimum expenditure obligation of over $8.7m.