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November 21, 2019

Government eyes 8,000MW of renewable energy

Business

November 21, 2019

ISLAMABAD: The government aims to add 7,000 to 8,000 megawatts of renewable energy to the grid system within next four years, a minister said on Wednesday.

Minister of Economic Affairs Hammad Azhar said governments in past have been importing coal for cheap energy production. “Nonetheless, the transportation cost of that coal was so high that the cost of electricity generation soared almost two times,” Azhar said, addressing the annual international conference of Applied Economics Research Centre.

The renewable energy policy envisaged a score of incentives for investors who plan to set up alternative energy plants. The objective is to bring up the share of renewable electricity generation into the energy mix from the present less than two percent. Foreign investors expressed interest in exploring investment opportunities in the sector.

Denmark has recently offered Pakistan micro/mini power plant technologies to help the country achieve energy security through shedding reliance on costly thermal power generation. The minister further said reduction of circular debt addition to zero is also under progress. He shared some facts which highlighted the resurging economy during the past one year. The minister informed the audience about the major reasons behind Pakistan’s stunted economic growth.

“Major reasons why Pakistan had been facing higher revenue to expenditure gap were low tax to GDP ratio, narrow tax base and undocumented economy,” he said. “The present political regime has been working on these three most pressing challenges.”

Azhar said the kind of tax collection done presently by the incumbent government is qualitatively different than the ones done in the past. Previously, the major chunk of tax collection was exacted through withholding taxes which are a form of indirect taxation. “However, aim of the present government is to ensure maximum collection through direct taxation.”

The minister said the country has emerged as one of the biggest improvers in the World Bank’s latest Ease of Doing Business Index 2020, jumping up 28 places on the index and clinching the 108th position compared to 136th last year.

“External and fiscal deficits are narrowing, inflation is expected to decline and growth, although slow, remains positive,” he said. “However, sustaining sound economic policies and advancing structural reforms remain key priorities to enhance resilience and pave the way for stronger and sustainable growth.”

The minister said budgetary collections are growing despite the ongoing compression in imports. Inflationary pressures are expected to recede soon, measures to strengthen the social safety net are being implemented and development spending is being prioritised.”

Azhar said current account deficit has also gone down by approximately 73 percent compared to last year. Exports, during the past one year, have gone up from $45 billion to $65 billion. He emphasised data-based research in the universities of Pakistan.

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