Dar announces to pay over Rs 500 billion circular debt of energy within 60 days; says all promises made by Nawaz Sharif would be honored

Dar announces to pay over Rs 500 billion circular debt of energy within 60 days; says all promises made by Nawaz Sharif would be honored

ISLAMABAD, (SANA): Finance Minister Senator Muhammad Ishaq Dar while presenting the economic surveyreport of 2012-13 said that the budget deficit remained over 4.7 percent. He said GDP of country remained at about three percent during the past five years. He said that the tax collection has decreased by Rs 350 billion. He said PML-N government will again take GDP at seven percent. He said all efforts would be made to pay over Rs 500 billion circular debt of energy sector within 60 days. He said the debts of country are Rs 13225 billion at present and would reach Rs 14000 billion at the end of June.

He said these debts were at Rs 6500 billion five years ago and were increased Rs 7500 billion during past five years. He said that these debts were at Rs 3000 billion during the PML-N government in 1999. He said that PML-N government will revive economy of country. He said loan could be taken for payment of past debts of country. He said PML-N government will not do anything illegal. He said the economy of country faced loss of 80 to 100 billion dollars due to war against terrorism. He said all the promises made by Prime Minister Mian Nawaz Sharif during the election campaign would be fulfilled.

Economic Survey says the GDP growth rate for the outgoing year would remain at 3.6% as against the targeted 4.3%.

Senator Ishaq Dar said average GDP growth rate during the last five years remained at three percent, which is pathetic in view of 2.1% population growth.

He said the previous PML-N government touched the figure of 7% GDP growth rate and it is their resolve to take it back to the same level in the intermediate term.

The Minister said the country missed almost all the targets in different sectors of the economy.

There would be a shortfall of 350 billion rupees in the FBR tax collection target of 2381 billion for the outgoing year.

The target for investment was 14.9% but the country is likely to achieve 14.2% by the close of the year. Foreign inflows were projects at 1.8 billion dollars but these remained 800 million dollars. Budgetary deficit was targeted at 4.7 percent but it would be around 8.5%.

The Finance Minister said the agriculture sector grew by 3.3% as against the target of 4.1% and the services sector 3.7% as against the targeted 4.3%.

Large-scale manufacturing however was positive as its growth is expected to be 2.8% as against 2% target for the year. Investment to GDP was targeted at 13.3% but it would be 12.6% for the year.

National Savings also showed an upward trend as the growth rate was 13.5% as against 12.8%.

Ishaq Dar said circular debt has assumed alarming proportions as it has crossed 500 billion ruppees despite injection of 1400 billion by the Government as subsidies during the last about five years.

He said an aggressive plan has been prepared to take the issue of circular debt head on and it would be eliminated within sixty days.

He said as of today 6.2 billion dollars worth of foreign exchange reserves are with the State Bank besides those with the commercial banks.

The Finance Minister said a road map has been prepared for economic revival as economy is as big a challenge as terrorism.

He said licenses for 3-G spectrum of mobile phone would be auctioned in a transparent manner so that the mobile industry grows further creating more employment opportunities.

The Minister said tax net would be expanded and appealed to all citizens to pay their due taxes. He said currently tax to GDP ratio is 8.9%, which is on the lowest side.

He said GDP growth rate for the next financial year has been fixed at 4.4% and 1155 billion rupees would be spent on development.

The Survey says the country’s public debt reached to 13,626 billion rupees by end-March this year which is 59.5% of GDP as compared with 59.8% during the same period last year. The composition of public debt has witnessed major changes over past few years with increasing reliance on domestic debt due to non-availability of sufficient funds from external sources.  The total domestic debt increased by 1,159 billion or 15% during first nine months of the current financial year. External debt and liabilities stock was recorded at 60.9 billion dollar by end-March this year.

The Survey says exports increased by 27% in 2010-11 and touched a record level of 25.4 billion dollar. There was a slight shortfall of 4.7% in exports during 2011-12 due to external factors.

It says inflationary trend in the economy subdued during current financial year. The Consumer Price Index for eleven months of the year averaged at 7.5% as against 10.9% same period last year.

According to Pakistan Social and Living Standard Measurement Survey 2011-12, the literacy rate remained 58 percent.

The Survey says Pakistan is sixth most populous country in the world with an estimated population of 184.35 million. The country has a labour force of 57.24 million people which is 0.91 million more than the last year. The unemployment rate has increased to 6.0 percent in 2010-11.

It says performance of Pakistan Railway and PIA was not encouraging mainly due to the heavily burdened administrative and management expenditure. Performance of Ports and Shipping sector was encouraging despite a depressed shipping scenario worldwide.

According to the survey, gross domestic product (GDP) growth rate fell short as earlier envisaged growth in industry and agriculture could not be achieved.

GDP growth rate for 2012-13 remained at 3.6 percent as against the target of 4 percent, in agriculture also the target was fixed at 4 percent but it fell short to 3.3 percent.

Wheat, corn and sugarcane crops remained near their targets, but cotton and rice production lagged behind. Livestock sector also could not get near the target of 3.9 percent, as it trailed behind at 3.7 percent.

The Industrial sector growth fell short at 3.7 percent against the target of 4.1 percent. The services sector missed its target of 4.6 percent registering only 3.7 percent.

Savings and investments shrank during the last five years, presently standing at 14.2 percent as against 19.2 percent in 2007-08.

The production of petroleum products rose by 13.47 percent, jet fuel by 0.47 percent, kerosene by 15.51 percent, petrol by 21.9 percent, diesel by 15.7 percent, furnace oil by 19.83 percent, while liquid petroleum gas production surged by 25.7 percent.

According to economic survey, the production of sugar went up by 3.04 percent, paper- board by 3.04 percent, while fertilizer production fell down by 7.84 percent and cement production rose by 6.08 percent.

Federal Minister for Planning and Development Chaudhry Ashan Iqbal and high officials of finance ministry were also present during the press conference of Finance Minister Ishaq Dar.

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