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 1. INTERNATIONAL   2. INDUSTRY
 3. FINANCE  4. POLICY
 5. TRADE  6. GULF

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INDUSTRY

July 01 - 07, 2002

RS130.7BN SURPLUS BUDGET FOR PUNJAB

Punjab Finance Minister Tariq Hamid on Monday presented a tax-free, surplus revenue budget of Rs130.725 billion for the financial year of 2002-03, estimating revenue income at Rs130.725 billion as against expenditure of Rs117.100 billion. The budget carries a revenue surplus of Rs13.625 billion.

The revenue outlay for the next fiscal year is about nine per cent greater than the budgetary estimates of Rs120.313 billion and 16.5 per cent higher than the revised estimates of Rs112.286 billion for the current year.

The general revenue receipts comprise transfers from the federal divisible pool which are estimated at Rs85.2 billion during 2002-03 against the revised estimates of Rs82.87 billion and budgetary estimates of Rs91.728 billion for the outgoing year.

Other federal transfers are estimated at Rs5.552 billion, provincial tax receipts at Rs12.033 billion and income from property and enterprizes at Rs1.231 billion. The receipts from civil administration and other functions are estimated to amount to Rs26.707 billion.

The revenue expenditure of Rs117.100 billion is up by Rs15.574 billion from the outgoing year's revised estimates of Rs101.526 billion. The increase is attributable to the impact of revised pays and pensions. The major share of Rs41.643 billion from the total revenue expenditure has been allocated for social services, Rs25.091 billion for debt servicing, investible funds and grants, Rs17.156 billion for general administration, Rs13.544 billion for economic services, Rs12.188 billion for law and order, Rs4.475 billion for community services, and Rs3 billion for subsidies.

PAKISTAN TEXTILE SECTOR AWAITS US INCENTIVES

Pakistan's textile and apparel industries, which dominate the country's economy and account for 60 per cent of its industrial employment, have been battered by a combination of restrictive American trade policies and repeated fears of war , first from the conflict in Afghanistan and more recently during Pakistan's confrontation with India, says the New York Times.

Several terrorist attacks against Westerners have made clothing buyers even more reluctant to go there. One result has been mass layoffs.

The NYT said that the setbacks for the textile industry, including the temporary laying off of tens of thousands of workers last winter, are breeding resentment towards the United States among many young Pakistanis.

BALOCHISTAN UNVEILS RS29.7BN BUDGET

Balochistan's Finance Minister Jalil Khan Dotani on Thursday afternoon presented a total budget of Rs29.79 billion for the coming fiscal year, which includes current revenue expenditure of Rs19.75 billion and a total development outlay of Rs10.03 billion.

Announcing a tax-free budget, the minister in his speech on radio and television network indicated a revenue surplus of Rs6.67 billion as total resources in the coming fiscal year were being estimated at Rs26.43 billion. This, he said, included provincial revenue of Rs1.53 billion and federal transfers totalling Rs24.89 billion.

He estimated an overall budget deficit of Rs1.9 billion in the coming fiscal year which, he expected, could be met from higher allocation of the National Finance Commission or the federal grants. "In case of delay in both, it may be met by the draw down of our cash balances," he said.

ADAMJEE JUTE MILLS CLOSED

In a bold move the government has decided to close down the country's first and the largest 52-year-old Adamjee Jute Mills (AJM) to cut the staggering losses being incurred by the state-owned enterprises (SOEs) annually.

The BNP-led coalition government is committed to privatizing all SOEs both loss-making as well as the profitable ones but strong, deeply entrenched vested interest groups within and outside the government have always tried to delay its implementation by one pretext or another.

It was decided that all the workers and staff members of AJM, around 25,000, will be given a 'golden handshake' and the government has already earmarked 3 billion taka ($51.7 million) for the purpose.

ISLAMABAD, MOSCOW TO SIGN MOU SOON

Pakistan and Russia are expected to sign a memorandum of understanding (MoU) in Moscow early next month to allow a Russian firm to actively pursue the construction of $3.2 billion gas pipeline from Iran to India besides assisting Pakistan in converting diesel vehicles to CNG.

Official sources told on Thursday that Minister for Petroleum Usman Aminuddin would be in Moscow on July 10 on the invitation of his Russian counterpart to sign the MoU.

The MoU would allow Russian energy firm Gazprom to launch a study on the construction of the pipeline and negotiate with international financial institutions for financial support to the project.

NWFP MAY SET ASIDE RS9.9BN

NWFP is likely to project around Rs9.9bn for debt servicing in its budget for the next financial year to repay part of its soaring domestic and foreign loan, according to sources.

"This would be the highest ever amount to be specified for debt servicing in a single financial year by the provincial government," said the official sources.

The province had set aside Rs8.6bn for debt servicing during 2001-02 financial year and retired a total debt of Rs7.1bn.

LOW STOCKS, HIGH PRICES HALT RICE EXPORTS

Pakistani rice prices were firm during the past week due to good local demand, but traders said on Monday higher domestic prices and falling stocks had halted exports.

They said falling stocks had forced local rice dealers to cover their positions as the new crop would not be available until September-October.