ECC approves Rs 2.9 billion bailout package for PSM ISLAMABAD, Sept 7 (APP): The Economic Coordination Committee (ECC) of the Cabinet on Saturday approved a three-month bailout package of Rs 2.9 billion for the Pakistan Steel Mills (PSM). Rs 1.5 billion will be released in September, Rs 700 million in October and Rs 700 million in November. This will include two-month salary of the workers. The ECC, which met here with Federal Minister for Finance Mohammad Ishaq Dar in the chair, discussed a proposal for an interim relief for the Pakistan Steel Mills and decided that the Chairman Board of Investment and the Ministry of Industries should come up with a proposal for long term solution of the problem in the next meeting. The ECC also decided that the PSM would remain a public sector enterprise,by seeking a strategic partner with a minority stake to run its management. The Governor State Bank of Pakistan informed the meeting that the SBP had received the first installment of US$ 550 million from the InternationalMonitoring Fund, thus increasing the foreign exchange reserve to US$ 10.4 billion. While reviewing the key economic indicators, the reasons behind the increase of inflation were analyzed thread bare by the ECC. The Finance Minister said the prime reason behind the increase of inflationwas that its rates were artificially maintained by the previous governments byholding back increase in tariff rates, which should have been passed over. The meeting noted that the rising trend had now been stemmed in the lastweek. Expressing satisfaction over the sugar stocks of 2.229 million tons, theECC directed the Trading Corporation of Pakistan (TCP) to purchase 100,000 MT tomaintain its strategic reserves. Similarly the ECC was told that presently the wheat stock was 7.043 tonscompared to 6.750 tons in the corresponding period last year. The ECC expressed satisfaction that there were 85 days of oil reserves inthe country, compared to 29 days in the corresponding period last year. Thisimprovement, the ECC noted, had come about as a result of clearance of circulardebt by the government. The ECC was informed that export in the month of July, 2013 increased by9% to US$ 2.62 billion. The ECC also discussed the need for a comprehensive strategy to bring inquantum growth in the exports of the country as the exports during the last fewyears have been hovering around $ 25 billion annually. The Finance Minister said that value addition, focus on non-conventionalitems and identifying of new markets were necessary for increase in the export. The ECC decided to constitute a committee with Deputy Chairman, PlanningCommission, Federal Minister Ahsan Iqbal as its chairman. The terms of the reference of the committee are to suggest concreterecommendations for quantum increase in exports of the country. The Chairman, BOISecretaries Commerce, Planning, Finance and Chairman, FBR will be its members. The committee will submit its recommendations to the ECC within a month.The ECC expressed satisfaction over the increase in collection of revenuesby the FBR by over 20 percent in July-August 2013 as compared to the corresponding period last year. The ECC hoped that the FBR would redouble its efforts to achieve the targetof Rs.2475 billion. The meeting was informed that large scale manufacturing had shown anincrease of 4.2 percent. However, it expressed dissatisfaction over the negativegrowth in sectors like engineering products, automobiles, wood products,electronic and fertilizers, ECC directed the Ministry of Industries to examine the decrease of growth in those sectors and come up with concrete recommendationsto improve these sectors. The ECC was told that in view of surplus position in the country and anexpected bumper crop, sugar mills may be allowed to export a total of 500,000 MTtons of sugar, 250,000 tons by October, 2013 and the remaining in November, 2013Sugar stocks position in the country would be reviewed on monthly basis and quota should be allocated on first come first served basis by SBP and exportshould be made against irrevocable letter of credit or a contract with 25%advance, it decided. Shipment should be made within 45 days of the registration of contract withthe SBP and non-refundable advance payment to be forfeited in case of nonshipment within 45 daysThe SBP should arrange via its website and for online submission ofapplications for quota by the sugar mills and decided that full disclosure of the record of quota allocation and its utilization for the purpose of transparency which can be viewed by public. The ECC took this decision subject to the condition that the sugar industry will clear the outstanding dues towards growers at the earliest and willstart crushing of sugarcane in Sind by November 1, 2013and Punjab by November15. The ECC decided that inland subsidy be reduced from Rs.1.75 to Rs.1.00 perkg. The decision is likely to earn a foreign exchange of $ 480 million. The ECC would continue to monitor the sugar situation in the country andshall protect the interest of consumers and stability of sugar prices in thecountry The ECC also directed the Ministry of Water and Power to present asummary to streamline the process of purchase of electricity from sugar industry. The Committee on the recommendation of the Engineering Board and aCommittee comprising Board of Investment, Industry and Commerce approved M/s Yamaha Motorcycle Industries to have qualified under the new entrant policy forMotorcycle Industry as an industry with new technology. The decision will clear the way for a Foreign Direct Investment of US$ 150 million. The ECC noted that this was the first foreign investment in the countrywhich reflects the confidence of the foreign investors in the investment andeconomic policies of the PML-N government. It would be pertinent to mention here that Yamaha Motorcycle had beenrunning from pillar to post for the past four years trying to seek governmentclearances on various counts. The Pakistan Poverty Alleviation Fund also made a comprehensivepresentation to the ECC about its performance and plans to enhance its work andeffectiveness. The meeting was attended by Minister for Industries and Production, Ghulam Murtaza Jatoi, Minister for Information and Broadcasting, Senator PervaizRashid, Minister for Planning and Development,Ahsan Iqbal, Ms. Anusha Rehman,Minister of State for Information Technology, Chairman FBR, Governor State Bankof Pakistan, Chairman Board of Investment and senior officials of ministries ofFinance, Water and Power, Planning and Development, Commerce, Communications andIndustries.
Posted on: Sat, 07 Sep 2013 16:59:21 +0000
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