Govt’s economic policy to enhance export sector: Finance Adviser

ISLAMABAD: Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh on Monday said that the ‘axis of the government’s economic policy is to enhance the export sector’ as he announced various decisions to boost construction and export activities.

The finance adviser was addressing a news conference along with Minister for Economic Affairs Hammad Azhar, Chairman Federal Board of Revenue (FBR) Shabbar Zaidi and Special Assistant on Information Dr Firdous Ashiq Awan.

Dr Hafeez Shaikh said that an extra amount of Rs200 billion will be given to exporters as subsidy. He said the share of loans given by State Bank of Pakistan is also being increased by 100 billion rupees for exporters.

“The axis of the government’s economic policy is to enhance the export sector. In this regard, we have decided to allocate Rs200bn to subsidize the export sector. The government will lower interest rates for exporters and the difference will be paid by the government,” he said.

“The Rs200bn will be offered as loans to exporters on discounted rates,” he said.

The finance adviser said that economic indicators of the country are on a positive trajectory with growth rate projected to increase. He said that external trade deficit is continuously reducing along with increase in dollar reserves of the country. He added that fiscal deficit has also saw reduction when compared with the previous year.

Dr Shaikh said the revenues collected by FBR have also seen upward trend, and the exchange rate of the rupee is being stabilised and is gradually improving. The situation of the stock market is also satisfactory and index gradually increasing, he added.

The adviser lauded the recent deal struck with traders of the country in which they were given incentives and also urged to become part of the documentation drive.

On the fiscal side, the finance adviser said, $2.1 billion of debt was returned in order to keep the credit rating of the country high. He said no money was borrowed from State Bank of Pakistan since the last four months, and as a result, the second tranche of the IMF package was approved.

The adviser further said President World Bank in his recent visit also hailed the reforms in FBR, SBP and power sector among other areas. He said the government has nothing to do with interest rates as the SBP was an independent institution.

Shaikh said government has decided to allocate extra Rs30 billion as subsidy for Naya Pakistan Housing Program. He said that the government has also decided to provide special tax relief to all businesses which support the project and participate in the activity.

He said it has been decided to cancel Sales Tax Refund Bonds immediately and the amount would be given in the form of cash to exporters to help increase their productivity.

In power sector, the adviser said, Rs250 billion will be given by the government to electricity producers by limiting sovereign guarantees in order to retire the circular debt.

Replying to a question, Dr Shaikh said talks between federation and provinces continue on NFC award, and the share of erstwhile FATA is being determined after merger with Khyber Pakhtunkhwa.

Responding to a question, he said the government is cognizant of the increase in prices of essential items and is working on various options to bring these down. Citing the recent example of the release of 650,000 tons of wheat, he said that the government was trying to increase supply to tackle exorbitant prices.

He said grant of Rs6 billion to Utility Stores Network will help bringing down prices of items of daily use. He said reforms process in the state-owned enterprises will be made taking care of the rights of the employees working there.