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Dar vows to build forex reserves upto Rs16b by end 2014

Dar vows to build forex reserves upto Rs16b by end 2014

KARACHI: Elaborating the government’s steps taken over the last eight months, the Federal Finance Minister said that the government has chalked out a comprehensive plan for building forex reserves to reach $ 16.021 billion by Dec 31, 2014.

He was speaking at the exports trophy awards ceremony of Karachi Chamber of Commerce and Industry (KCCI), which was graced by Prime Minister Muhammad Nawaz Sharif as the chief guest.

Federal Finance Minister Ishaq Dar has said that for over 8 months the economy has registered an all-round performance indicating that there is a solid turn-around in the country. Government is now in a position to pass on benefits.

He said that almost every single economic indicator including Gross Domestic Product (GDP), inflation, agriculture, industry, imports, exports, remittances, foreign inflows, exchange rate stability, interest rate, fiscal deficit, revenues, reserves and public debt show a positive beginning for the country’s economy.

“Allah has rewarded our pure and good intentions, the hard work that our government has rendered under the exemplary leadership of Prime Minister Muhammad Nawaz Sharif,” he remarked. He said that the confidence of the people of Pakistan has been revived and it is bringing about a remarkable turn-around to the economy.

“There are numerous challenges and milestones that we have to achieve and hence we are not complacent by this initial success, rather our resolve to work harder has been strengthened and we will work with more vigour and energy to achieve our objectives,” he said.

The Prime Minister has announced far-reaching tax incentives as well as a comprehensive youth programme, he added. Under the tax incentives, non-filers of tax returns as well as dormant NTN holders can avail concessions by April 30, 2014. While for investment scheme, commercial operation date has been fixed on or before June 2016 to avail incentives under the PM’s package for industrial growth.

The government has also published, in terms of the provisions of Section 216(6) of the Income Tax Ordinance, 2001, a tax directory containing names, NTNs and tax paid by all the parliamentarians. In the second phase, a tax directory of all taxpayers in the country will be published, he said.

The finance minister said that efforts were underway to disinvest, in a transparent manner, shares of certain banks and PSEs in the stock market. The government’s preferred option is strategic partner with 26 per cent shares and handing over of management.

As post-budget relief, the government has announced 26 measures to boost the business sector.
It has also announced withdrawal of two per cent extra tax for further processing of parts and in use of manufacturing vehicles.

“We have announced that all sales tax refund cases up to one million rupees would be processed and sanctioned as per law by April 15, 2014. There will be 26,000 beneficiaries of this measure out of a total of 36,000 cases,” he said.

The minister said that incorporation of new companies has increased by 14.95 per cent in the first eight months of FY 2013-14 as compared to same period last year. KSE index has risen showing an increase of 37.1 per cent. Federal Board of Revenue’s revenue collection has risen to Rs 1,348 billion during July to February 2013-14 as compared to Rs 1,145 billion; an increase of 17.7 per cent. In the first eight months of 2013-14, budget deficit has decreased from 1,053 billion to Rs 1,015 billion, he said. Remittances during the same period have increased to $ 10.24 billion as compared to $ 9.23 last fiscal year; showing an increase of 11.2 per cent. The exports have increased by 6.2 % during July-February of fiscal year 2013-14 as compared with same period of 2012-13, he said.

The minister said that Pakistani Rupee has improved its value against dollar; pushing down dollar below Rs 100 in the interbank and open market. Foreign exchange reserves have improved to $9.52 billion as on March 11, 2014. Overall, the quarterly GDP growth in 1st quarter 2013-14 has been 5 per cent including growth in LSM of 6.8% in that quarter. Significantly, LSM grew by 13.2% in the month of December 2013; a rate unprecedented in the last seven years.

The finance minister said that government’s policies and decisions have got international recognition. The Overseas Investors Chamber of Commerce and Industry (OICCI) which conducts regular surveys on business confidence, has raised its index for Pakistan from -34 to +2.

According to Perception and Investment Survey 2013 (conducted during September-November 2013) released by the OICCI on January 28, 2014 foreign investors intend to inject around  $3 billion investment in the Pakistani economy in the next five years due to the fact that foreign investors have done well in terms of their bottom lines.

Federal Minister said that Pakistan has been ranked second in the world in terms of business growth in a survey conducted by the Japan External Trade Organization. Former Goldman Sachs economist Jim O’ Neill, famous for coining the term BRIC, coined another term MINT identifying top investment destinations in the coming years. He has also forecast that Pakistan would become world’s 18th largest economy by 2050 (from its present 44th position).

Highlighting the government’s medium-term economic roadmap, the minister said, “Our medium term 3-year aim is to raise the GDP growth gradually to around 6-7 per cent, investment to GDP upto 20%, tax to GDP upto 13 % and foreign exchange reserves to around $ 20 billion. Also, we aim to bring fiscal deficit down to 4% of GDP and public debt to below 60% of GDP as per statutory requirement.”