Overwhelmed by APTMA push, Dar announces subsidy

ZAHEER ABBASI

ISLAMABAD: The government has announced a power subsidy of Rs100 billion to five export-oriented sectors for providing electricity at Rs19.99 per unit (all inclusive) rather than nine cents.

This was announced by Finance Minister Ishaq Dar at a news conference along with representatives of the All Pakistan Textile Mills Association (APTMA) after a meeting on Thursday.

The finance minister said that the provision of electricity at a subsidised price till June 2023 would cost Rs100 billion to the government on account of cost differential. The finance minister said that in 2017, the then government had decided to provide an incentive package of Rs180 billion to the export-oriented sector after they promised to increase their exports by 10 percent. Subsequently, another Rs67 billion was provided to them and as a result of the Rs247 billion package targeted subsidy contributed to 12.7 percent increase in exports.

However, he said that that was not followed by the subsequent government.

He said that the exports increase by 15 to 20 percent would solve the problem of external account and the country would not be taking external loans.

The finance minister said that as soon as he arrived, the value of the rupee started improving and the difference of Rs12 between open and interbank came to Re1. He said that the actual value of the dollar is below Rs200.

The finance minister said that the improvement of the rupee has reduced the country’s debt and liabilities by Rs2,600 billion. He said that he has not used a stick but the rupee was gaining strength against the dollar which is a good thing. He said that there would be “lag impact” of exchange rate on inflation and the prices would decrease.

Dar also said that a three-member delegation under his supervision will conduct talks with the IMF on the occasion of the annual meeting from Monday.

The other members of the delegation include the finance secretary and the State Bank governor.

Replying to questions, he said that he does not need to take the International Monetary Fund (IMF) into confidence on this package as it is his responsibility to create fiscal space with any impact on the primary and fiscal deficit to finance it. He said that he has the backup resources to finance the package. He also said that Nawaz Sharif will come to Pakistan soon and termed the rumours about withdrawing Rs720million as salary as senator for the past years as propaganda against him by Imran Khan’s “social media army”.