ISLAMABAD: The Cabinet Committee on Economic Revival (CCER) has asked the Minister for Planning to slash down the Public Sector Development Programme (PSDP) allocation by Rs200-250 billion through abolishing unimportant projects.
The CCER meeting was held on Monday to further fine-tune proposals to give it final shape but it also witnessed a heated debate over Minister of Commerce Ejaz Gohar’s proposal for the provision of cheap electricity for exporters, especially the textile exporters. Minister for Energy Mohammad Ali opposed it, arguing that it would have no other option but to shift the burden on the consumers which were already raising hue and cry over inflated electricity billing.
“Minister for Finance Dr Shamshad Akhtar advised both the ministers to sit down and work out modalities for the export-oriented sector by devising a joint strategy. If the need arises, the Minister for Finance will also sit with them to work out modalities without provision of any additional subsidy in the next 24 to 48 hours,” top official sources confirmed while talking to ‘The News’ on Monday.
The Cabinet Committee on Economic Revival is all set to finalise its recommendations before submitting them to the cabinet to get the final nod of the caretaker premier and other members.
“The Minister for Planning has been assigned to identify those development projects where the utilisation was minimal or play no significant role for promoting growth, secondly the provincial nature projects and thirdly politically-motivated projects and all such schemes would be scrapped,” a top official said, adding the PSDP allocation stands at Rs950 billion which might be rationalised to bring it in line with the IMF’s desired fiscal framework.
The official sources summarised the previous meetings of CCER and reminded that the chairperson apprised the members about the committee’s purpose, which is to deliberate on strategies and policies to revitalise the economy. She also mentioned that it is imperative to draw upon our expertise and perspectives to shape holistic solutions to cater to the citizens’ needs and the nation’s aspirations.
The Finance Division secretary highlighted that the committee is mandated to identify measures for economic revival within two weeks, covering critical areas including fiscal discipline, investment, competitiveness, energy sector, enhancing exports, improving income and employment opportunities, and leveraging capital market for domestic resource generation, with a short-term focus. Afterwards, the chairperson opened the forum for discussion.
The Minister for Commerce, Industries and Production emphasized that the CCER is the need of time, adding that efforts be made to reinstate investors’ confidence and market sentiments so that the stock market may not lose its volume. He proposed that there is a need to implement uniform gas tariffs across the country, adding that there is also a need to analyse regional prices of energy to make exports more competitive. The chair appreciated the proposals and emphasised that the participation of the private sector is necessary for the revival of the economy.
The Minister for Energy highlighted different issues such as capacity payments, NTDC transmission, and bilateral selling of electricity, adding that the ministry is working towards addressing the existing issues in the context of affordability, accessibility, sustainability, and price distortions. The chairperson added that macroeconomic stability can be achieved through reinstating the confidence of the private sector and domestic resource mobilisation. In this context, short-term as well as medium-term measures be suggested, so that the upcoming elected government is able to keep the country on the trajectory of sustainable development, the chairperson added.
The Minister for Communication, Maritime Affairs, and Railways highlighted that Afghanistan is also accessing the Forex market of Pakistan for its domestic foreign currency needs, which is in turn creating pressure on the foreign exchange rate in Pakistan. He said the issue of mushroom growth of acquiring agricultural land for real estate was suggested to be dealt with appropriately.
He also emphasised that the public-private partnership mechanism can be helpful in enhancing the performance of Pakistan Railways. The chair supported this view and highlighted the need for low-cost transportation mechanism in the country. She also urged to come up with proposals that bring the private sector into the commercial operations of Railways.
The Minister for IT, Telecommunication and Science and Technology emphasised that many proposals can be initiated, and resources can be mobilised, adding that however, there are hurdles in the context of FBR regulations, tax anomalies and SBP procedures for the IT industry. The chair ensured full support and commitment in settling the issues to be proposed by the Ministry of IT and Telecommunication within the SBA programme of the IMF.
The Minister for Planning, Development, and Special Initiatives mentioned the need of ease of doing business and domestic resource mobilisation. He mentioned that ToR no 9 of CCER is the mandate of Ministry of Planning, Development and Special Initiatives, and added that currently, the annual plan and 5Es framework are ready and relevant measures will be shared in upcoming meetings. The chair stressed on envisioning the revival plan on the private investment-led growth model instead of wholly relying on public investment-led growth.
The SAPM on Maritime Affairs indicated the need for reduction of freight bill as it is draining foreign currency from the country, adding that the private sector participation is important in shipping industry. As such, there are hurdles in purchasing old ships due to PPRA rules, the SAPM said, adding that the sustainable growth of ship breaking industry and development of fishing sector are highly needed.
The SAPM on Finance highlighted that macroeconomic framework has pivotal role, adding that currently, inflation is too high, so an oversight committee be formed. He further said the IT/vocational training can be useful in generating employment opportunities, adding that the agro-based industry and horticulture diversification can be helpful in boosting exports. The chair emphasised the need of collective wisdom to curtail inflation and dealing with the other issues.