ISLAMABAD - Finance Minister Senator Ishaq Dar on Thursday said that Pakistan’s exports would increase by at least $2 billion by getting (Generalised Scheme of Preferences) GSP+ status from European Union (EU) that would be effective from January 2014.
Addressing Sustainable Development Policy Institute’s annual Sustainable Development conference, Finance Minister said that government has taken unpopular decisions to sustain dwindling national economy. Due to these measures and prudent polices of the government economic indicators are showing positive signs whereas the foreign investors confidence to invest in Pakistan was also restored, he maintained.
He informed that government is working to bring budget deficit at 6 percent of the GDP during ongoing fiscal year 2013-14 from 8 percent of the previous year. The government has planned to increase tax to GDP ratio to 15 percent in next five years from existing 8.5 percent, he added.
“Inflation is closely monitored and the target of managing it within a single digit is diligently pursued with considerable success.
The recent surge in prices is the result of delayed energy price adjustments, lower tax collections last year, rising international oil prices and seasonal supply disruptions”, said Ishaq Dar. He was of the view that exchange rate and foreign exchange reserves would be stable after completing repayment of installments of past loans amounting to a massive $3 billion to IMF.
Finance Minister said, “We are expanding the income support programme from 4.8 million poorest families to 5.5 families, while at the same time we have increased the monthly stipend by 20pc from Rs. 1,000 to Rs 1,200”.
He informed that government has taken a number of other initiatives to improve financial stability of the country and make it more business-friendly and open to investment and trade.
The initiatives included revamping of tax administration, rationalisation of tax rates, recently announced incentives for promotion of investment; grant of GSP Plus status to Pakistan by the European Union from 1st January 2014, efforts to disinvest shares of certain banks and PSEs in the stock market; and new schemes to promote entrepreneurial activity amongst the youth.
Talking about energy sector, Finance Minister said government took several steps to resolve the power crisis including clearance of long standing circular debt of more than Rs.480 billion, enabling additional 1,700 MW power to the national grid that has significantly reduced the outages; new energy policy has been formulated, coal-based Gadani Power Park that will produce 6600 MW of coal-based power; reactivation of Nandipur Power Project which will add 425 MW to the national grid (525 MW if operated on gas) with a goal to complete it during year 2014 and financial close on two civil nuclear power generation projects in Karachi with a capacity of 2,117 MW.
He informed about other projects including accelerated work on Neelum-Jhelum Hydro Project with 969 MW generation capacity with a target completion during 2016; Work on Dasu Hydropower Project (4600 MW) and Diamir-Bhasha Dam (4500 MW) with water reservoir is being initiated simultaneously; two coal powered plants totaling 1320 MW are being established at Jamshoro; and the government has entered into an agreement on the Central Asia South Asia (CASA)-1000, which, once completed, will provide 1000 MW electricity to the country’s national grid.
Ishaq Dar also briefed about 3 year’s medium-term macro-economic goals fixed by the Government included GDP growth to gradually rise to around 7pc; investment/ GDP to rise to 20pc; fiscal deficit to be brought down to 4pc of GDP; Pakistan’s foreign exchange reserves to be increased to around $20 billion; and public debt to be reduced to under 60pc of GDP under statutory limit.