ISLAMABAD - National Assembly Standing Committee on Finance and Revenue has directed the State Bank of Pakistan to keep an eye on the rising trend of inflation rate and dollar rate.
The Standing Committee on Finance and Revenue met under the chairmanship of Qaiser Ahmed Sheikh, MNA in the Parliament House, Islamabad. The committee has discussed the inflation rate and soaring dollar value against the rupee. The committee has expressed concern over the higher inflation rate and continuous currency depreciation. The committee was of the view that State Bank of Pakistan should exercise its authority and control the problems. Chairman Standing Committee said that increase in interest rate was not a solution to control inflation. Besides, inflow of dollars should be encouraged through exports. The Committee was apprised by the Deputy Governor State Bank that inflation was a huge problem and in order to address it, its root causes had to be addressed. He said that global increase in prices of commodities and natural calamities had affected supply chain.
He also apprised about the increase in interest rate, restriction on import of luxury items and facilitation to the exporters/importers. Apprising about the increase in rate of dollar, he said that the SBP does not fix the price of dollar and it is based on market. He said that state Bank had taken various administrative measures to check the price of dollar in the open market. He also informed that there was a significant difference between outflow and inflow of dollars. Later, the Committee directed the State Bank to keep a vigilant eye on the rising trend of inflation and dollar.
Minister of State for Finance and Revenue Ayesha Ghous Pasha gave a comprehensive briefing on IMF agreement with Government of Pakistan for extended fund facility. She apprised the Committee that the program was suspended by the IMF due to deviations by the previous government. She apprised that the agreement was thoroughly negotiated keeping in view the national interests of Pakistan. She agreed that the economy cannot be uplifted by quick fixes. She stressed for structural changes and long term policies for making the country’s economy vibrant and growth oriented. The minister of state informed that circular debt management, income tax reforms and divesting shares of state own organisations were some of the major points.
The minister of state also informed that the recent unprecedented floods and devastation caused in all provinces had given a major blow to the financial resources of the country. She said that funds were diverted to provision of relief/rescue to the affectees. She said that their rehabilitation and reconstruction of infrastructure was an uphill task. She said that financial estimates for PSDP for the current financial years will likely be redrawn keeping in view the reconstruction of the devastated infrastructure. She said that the government has no plan to announce mini budget on the demand of the International Monetary Fund (IMF). She said that losses due to floods are projected at around $30 billion. The government and IMF would hold talks in November or December for the next review.
The Committee decided to defer discussion on The Modaraba Companies and Modaraba (Floatation and Control) (Amendment) Bill, 2020 for its next meeting. The Committee also expressed its annoyance on absence of Secretary Finance Division and Governor State Bank from the meeting. They Committee decided that it will not take up any government agenda in future in case relevant senior officers were absent without prior permission of the Committee. The Committee allowed Finance Division to withdraw The Income Tax (Amendment) Bill, 2021 (Ord. No. II of 2021), The Tax Laws (Amendment) Bill, 2021 (Ord. No. VI of 2021) and The Tax Laws (Third Amendment) Bill, 2021 (Ord. No. XXII of 2021). The Committee was apprised that the above bills have already been made part of the Finance Act. The Committee also pended consideration of The Eradication of Riba Bill, 2019” (moved by Moulana Abdul Akbar Chitrali, MNA) due to absence of the mover.
While discussing the relief and rehabilitation efforts of the National Disaster Management Authority (NDMA), the committee directed to ensure that the survey of the devastation caused by floods is completed at the earliest so that the government could announce financial assistance package for the flood effectees rehabilitation. The representative of the NDMA apprised the Committee about the extent of devastation caused by torrential rains and floods, relief operations and through NDMA, PDMAs and social sector organisations etc. The Minister of State for Finance informed that the quantum of financial assistance through BISP had also been increased.