June 11 -
Drug price hike recommended
The Ministry of Health has recommended to the Economic
Coordination Committee of the cabinet to okay an increase of 6% to 8% in the
prices of controlled drugs and an 8% to 10% raise in the prices of decontrolled
drugs to the federal cabinet, highly placed official sources told on Thursday.
The sources said the Federal Secretary of Health Ejaz Rahim
had written to the ECC with the consent of the Federal Health Minister Abdul
Malick Kasi that due to change in various economic indicators, including rupee
devaluation, increase in consumer price index by around 6% and repeated hike in
the prices of energy since the last revision in the drug prices in June 2000,
the pharmaceutical industry has started "clamouring" for an upward
revision according to a 1994 government formula.
The secretary in his correspondence with ECC has said that
due to the pressure of pharmaceutical industry his ministry is of the view that
a 6% to 8% and 8% to 10% raise in the prices of controlled and decontrolled
drugs, respectively, should be allowed.
The secretary, while endorsing the increase, said: "The
8% to 10% raise in the prices of decontrolled drugs is in accordance with the
past price adjustments when certain premium over and above the controlled
category was given to the de-controlled category with the approval of the ECC
and the cabinet."
The revision in the prices, it has been learnt, would be
calculated on the basis of brand leader prices. The increase so arrived at would
form the ceiling within which all the manufacturers/importers would be entitled
to fix their retail prices.
The sources, however, termed this system faulty and to the
benefit of those companies who were producing cheaper drugs as they get a raise
much more than the sanctioned increase. These companies, it has been further
learnt, are already giving undue profits to the wholesalers due to large margins
and are involved in the promotion of unethical and corrupt practices among the
Budget-makers face the most challenging job of dove-tailing
the IMF mandated short-term fiscal stabilization programme with the imperatives
of bigger investment, high economic growth and poverty alleviation.
The government focus — narrowing on issues like fiscal
deficit; tight monetary policy and market driven exchange rate has — for all
practical purposes, sidelined basic concerns of real economy. The outcome is
subdued investment, low economic growth, soaring unemployment and dire poverty.
Fiscal problems can be more easily resolved in a buoyant real
And fiscal stability is far more difficult to achieve in a
difficult economic situation as is evident from the trends emerging from drastic
fall in the GDP growth, primarily as a result of drought and poor performance of
agricultural sector. Financial analysts at Taurus Securities say, "given
the setback of a drought, the government will have to face agonising trade-off
between its goals of short term stabilization, higher economic growth and
WAPDA to float Rs 34 billion bonds
Water and Power Development Authority (WAPDA) has decided to
float Rs34 billion bonds after June 30 to meet its projected cash shortfall of
almost equivalent amount in the coming fiscal year.
Sources in the finance ministry told that this information
was also conveyed to the World Bank and International Monetary Fund (IMF) during
the recent meetings. The measure is being contemplated because of a ban on
electricity tariff raise during the current fiscal year imposed by the chief
Arif Habib Investments a fund management company — plans
soft launching of two funds to raise seed capital of Rs500 million, before the
end of June, company sources said.
New KESC restructuring planned
Another restructuring of the cash starved Karachi Electricity
Supply Corporation (KESC) has been planned by the Privatisation Commission with
the financial help of the Asian Development Bank (ADB) to reduce the colossal
operational losses of the organisation.
"The Privatisation Commission has decided to have
another restructuring of the KESC to prevent its Rs 50 million daily operational
losses", disclosed the Secretary Privatisation Commission, Mr Zafar Ali
Khan on Friday. He said that restructuring worth Rs 34 billion has already been
done with the financial assistance of the ADB and added that the Financial
Advisor of the KESC was currently trying to contact some more foreign lending
agencies to have another restructuring of the organisation.
Musharraf felicitates Tony Blair
Chief Executive General Pervez Musharraf on Friday sent
"warmest felicitations" to British Prime Minister Tony Blair on his
landslide victory in the United Kingdom's general elections. "Please accept
my warmest felicitations on your landslide victory in the British general
elections," he said in his message to the British Prime Minister.
Govt to give PIA Rs 20 billion
The government will provide Rs20 billion to Pakistan
International Airlines (PIA) to make it a stable and profit-earning
organization. This was decided at a meeting held on Wednesday , in which Chief
Executive Gen Pervez Musharraf was given briefing about the present condition of
The chief executive was briefed about the upcoming projects
to be undertaken for further improvement of the PIA. The airline plans to earn a
profit of Rs2.6 billion next year and Rs4 billion by 2004. The meeting also
decided to suspend PIA union and staff associations. It was also decided that no
employee will be laid off.