Latest news with #Rs115
Express Tribune
7 days ago
- Business
- Express Tribune
Finance committee of cabinet approves major grants
The Finance Committee of the Sindh Cabinet in its meeting on Wednesday approved major grants, deferred some funding requests for lack of details and rejected a request from the Sports and Youth Affairs Department for a grant of Rs2 million from non-development funds to organise a football championship in Malir PS-89. The committee directed the Sports and Youth Affairs Department to hold the tournament utilising allocated budget and stated that any funding shortfall at the end of the year would be reviewed separately. The meeting, held with Local Government Minister Saeed Ghani and Home and Law Minister Ziaul Hassan Lanjar in the chair, was attended by the chief secretary, finance secretary, secretaries of all concerned departments and other senior officials. The committee approved a grant of Rs115 million from non-ADP funds for the ongoing construction of the Government Degree College at Ghorabari, Thatta District, and sanctioned Rs248 million for the installation of water storage tanks along with solar-powered pumping stations at Ex-Nara Canal, Khipro, Sanghar District. A one-time grant of Rs45 million was approved to cover transportation and installation costs of agricultural machinery gifted by China to the federal government, which included Sindh's share. The ministers expressed reservations over this additional expense, directing that in future such gifts should be received directly at Karachi Port to avoid unnecessary costs. The committee also approved a one-time payment of Rs141 million to settle dues of retired employees of the Sindh Seed Corporation in compliance with a court order, with the condition that no further grants would be sought for this purpose in future. A grant of Rs300 million from non-development funds was sanctioned for the repatriation of illegal Afghans residing in Pakistan. However, a request for grant funding for the Langar Khana (free meal facility) at the shrine of Sachal Sarmast was deferred until a detailed report, including information on donations received at the shrine, is submitted. Likewise, the request from Sindh Solid Waste Management Board for Rs15 billion was also deferred until submission of complete documentation and detailed justification. The ministers directed all departmental secretaries to ensure that future cases presented before the committee are backed by complete working papers and detailed data so that the committee can prepare its recommendations for the cabinet based on full facts.
Express Tribune
04-07-2025
- Politics
- Express Tribune
Gandapur dismisses rift, defends budget
Khyber-Pakhtunkhwa Chief Minister, Ali Amin Gandapur, has dismissed any speculation regarding the stability of his government, stating that all members are united and no one is defecting. "If anyone is eager to bring a no-confidence motion, they are welcome to try — it will only expose the truth," he remarked. He added that had the budget not been passed, the government would have collapsed, and the blame would lie solely with PTI, while opponents would be celebrating. Speaking informally to senior journalists at the Chief Minister's House in Peshawar on Friday, Gandapur reiterated his call to the federal government to open trade routes with Afghanistan — from Chitral to Angoor Adda in Waziristan. "This move will not only boost trade but also ensure regional peace," he said. He also urged that individuals with legal status and those wishing to acquire Pakistani citizenship should be granted it, to promote foreign investment in the province. Gandapur addressed internal party tensions surrounding the budget, stating, "There was propaganda from within that the budget shouldn't be presented, and once it was, noise was made about not passing it. However, when Barrister Saif briefed our party's Patron-in-Chief, he expressed satisfaction with the budget's approval." He revealed that only two members abstained from voting for the budget, adding, "Everyone knows who they're aligned with." He hinted that more clarity on internal matters will emerge once the newly elected members of the provincial assembly are sworn in, and said the party's strategy will be shaped accordingly. The chief minister also explained that due to recent legal interpretations, none of the current assembly members are officially affiliated with PTI, as the Supreme Court's previous decision has been nullified following the July 21 Senate ruling. "Everyone is now considered independent, except me," he emphasized. "I'm still a PTI member, as I listed PTI as my party affiliation in my nomination papers." Responding to criticism over alleged extravagant spending, Gandapur clarified: "I didn't spend Rs115 million on biscuits. That amount was used to provide meals for 400 Class-IV staff members at the CM House and Secretariat." He defended his fiscal record, noting, "While I do spend, I've also saved Rs250 billion. It's the responsibility of political leaders to keep bureaucracy in check — and we will do that." While acknowledging that corruption hasn't been entirely eradicated, Gandapur claimed significant control has been achieved. "I'm accountable not for 12 years but for the 15 months of my current tenure," he added. He concluded by announcing plans to revive closed industries in the province by ensuring the provision of low-cost electricity.
Express Tribune
28-06-2025
- Business
- Express Tribune
Govt urged to end bank subsidies
Listen to article An independent think tank has urged the government to choose between subsidising already-profitable banks or diverting limited fiscal resources toward productive sectors by ending the policy of banks guaranteed returns on government borrowing. The Economic Policy and Business Development (EPBD), a new policy research institute, released the statement the same day a federal cabinet body criticised excessive subsidies to banks in the name of attracting remittances. The Economic Coordination Committee (ECC) of the Cabinet was informed Friday that banks had claimed Rs200 billion under the Pakistan Remittances Initiative during the current fiscal year — Rs115 billion more than the budgeted subsidy. The EPBD stated that the current fiscal structure forces a choice between supporting economic growth and subsidising banking profits through guaranteed government payments. It argued that Pakistani businesses face structural disadvantages compared to regional peers who enjoy policies that enhance rather than restrict productive economic activity. The think tank stressed that economic growth requires policy alignment with development objectives — not bank profit maximisation. The current approach of keeping policy rates at 11% while allocating Rs7.2 trillion for domestic debt servicing ensures stagnation, while regional competitors grow their industrial and export capacity. The government has allocated Rs8.2 trillion for total debt servicing — equal to 46% of the 2024-25 budget. Of this, Rs7.2 trillion will go to domestic banks holding government securities. With 59% of public debt held in floating-rate instruments, the think tank argued that reducing policy rates from 11% to 6% would yield immediate savings. The government worsened this burden by issuing Rs2 trillion in fixed-rate Pakistan Investment Bonds (PIBs) at peak interest rates of 22% over the past two years, locking in excessive costs to the benefit of banks, it added. By cutting interest rates to 6%, in line with falling inflation, the government could save Rs3 trillion on debt servicing. Even a portion of this amount, the think tank said, could lower business costs and stimulate employment. A 6% rate would still offer banks real returns while easing debt burdens. The savings could support manufacturing revival, industrial expansion, SME financing, technology upgrades, and export growth. The statement added that Pakistan's future depends on diverting resources from guaranteed banking profits to investments that create jobs, enhance productivity, and ensure long-term growth. Pakistani businesses cannot expand or generate employment while banks earn risk-free profits from public funds. In contrast, regional economies maintain 5.5% policy rates, allocate only 25% of budgets to debt servicing, and still achieve 6% GDP growth by prioritising business development. The EPBD challenged the claim that lower interest rates fuel current account deficits. It cited the $19 billion deficit in 2021-22, which it attributed to exceptional, non-interest-sensitive imports such as $3.2 billion in COVID-19 vaccines, $15.6 billion in fuel, and $1.7 billion in smartphones. It said high interest rates did nothing to limit those imports and instead suppressed domestic activity. The think tank added that guaranteed profits have led banks to retreat from commercial lending, opting instead for risk-free government bonds. With 97.3% of bank investments tied up in government debt, virtually no capital remains for working capital, expansion, or technology adoption. Manufacturers struggle to finance inventory, exporters lose global competitiveness, and small businesses are excluded from credit. Pakistan's banks have effectively become bond traders, contributing no value to the real economy while earning from taxpayer-backed securities. The think tank also criticised the remittance structure, noting that Rs87 billion went to banks for basic transfersfunds that could instead support small businesses and entrepreneurship. Its statement came as the ECC met to deliberate the future of remittance-linked subsidies. The finance ministry has decided to end the subsidies in 2024-25 due to pressure from banks and International Monetary Fund (IMF) constraints. The State Bank of Pakistan told the ECC it could no longer offer implicit support under IMF rules. Although the ECC requested a transition plan, the finance ministry said no study has determined any positive impact of these subsidies. Officials noted that funds largely benefit banks and exchange companies, not overseas Pakistanis sending remittances. The central bank informed the ECC that remittance promotion schemes have existed since 1985, but their effectiveness remains unverified. Without reform, the remittance subsidy bill could swell to Rs500 billion in coming years, warned a finance ministry official. The think tank reiterated that businesses do not need subsidies or special treatment — just a level playing field. Reducing interest rates to 6% would bring Pakistan in line with regional rivals, restore manufacturing competitiveness, and improve global market access for exporters. Such a move would also accelerate technology adoption and job creation across sectors, the EPBD argued. Although manufacturing capacity exists, it remains underutilised due to lack of financing. With 97% of banks' balance sheets locked in public debt, there is little scope to support private sector growth. Regional countries have demonstrated that supporting businesses through growth-oriented credit policies can deliver 6% growth while maintaining fiscal stability, it added.
Express Tribune
16-06-2025
- Business
- Express Tribune
SBP holds interest rate at 11% amid signs of recovery and stable inflation
Listen to article The State Bank of Pakistan (SBP) has decided to maintain the policy interest rate at 11% in its latest monetary policy statement, citing expectations of stabilised inflation and gradual economic recovery. According to the SBP, inflation in May rose by 3.5%, and it is expected to align with the target range in FY26. Despite a consistent rise in the trade deficit, the current account remained nearly balanced in April 2025. The central bank also noted that proposed budgetary measures may further widen the trade gap. Pakistan's real GDP growth for the current fiscal year has been estimated at 2.7%, while a target of 4.2% has been set for the next fiscal year. Economic momentum improved in the second half, with GDP growth reaching 3.9%, driven by better performance in industry and services. However, the agriculture sector underperformed due to a decline in key crop yields. The SBP reported that foreign exchange reserves had risen to $11.7 billion. The current account posted a $1.9 billion surplus over the past 10 months. The central bank reaffirmed that the existing interest rate is appropriate to maintain inflation within the 5–7% range. It expects continued economic growth next year, led by industrial and services sectors, despite limited inflationary impact from the latest federal budget. Earlier, the central bank is expected to hold its policy rate, a Reuters' poll showed, as many analysts shifted their previous view of a cut in the wake of Israel's military strike on Iran, citing inflation risks from rising global commodity prices. Israel said on Friday it targeted nuclear facilities, ballistic missile factories and military commanders in a "pre-emptive strike" to prevent Tehran from building an atomic weapon. Several brokerages had initially expected a cut but revised their forecasts after the Israeli strikes sparked fears of a broader conflict. The escalating hostilities triggered a sharp spike in oil prices – a worry for Pakistan given the broader impact on imported inflation from a potentially prolonged conflict and tightening of crude supplies. Eleven of 14 respondents in a snap poll expected the State Bank of Pakistan (SBP) to leave the benchmark rate unchanged at 11%. Two forecast a 100-basis-point cut and one predicted a 50bps cut. On the other hand, the International Monetary Fund (IMF) has raised concerns over provision of Rs344 billion grants to various sectors without approval from the National Assembly. Sources said the multilateral lender termed the grant for defence, Independent Power Producers (IPPs) and other sectors without the nod of parliament a violation of the govt-IMF agreement. The federal government has additionally spent Rs344.66 billion during the current fiscal year in the shape of grants. The government doled out Rs115 billion to IPPs, Rs30 billion to flood victims in Sindh, and Rs6 billion to the Federal Board of Revenue (FBR). Similarly, it spent Rs14 billion on solarization, Rs23 billion on anti-terrorism initiatives, and Rs2 billion on technology upgrades. Likewise, the government also released Rs3.7 billion for the Reko Diq project, Rs520 million for Special Investment Facilitation Council (SIFC) and Rs7 billion for parliamentarians' schemes.
Express Tribune
13-06-2025
- Business
- Express Tribune
IMF raises eyebrows over Rs344b grant
The International Monetary Fund (IMF) has raised concerns over provision of Rs344 billion grants to various sectors without approval from the National Assembly. Sources said the multilateral lender termed the grant for defence, Independent Power Producers (IPPs) and other sectors without the nod of parliament a violation of the govt-IMF agreement. The federal government has additionally spent Rs344.66 billion during the current fiscal year in the shape of grants. The government doled out Rs115 billion to IPPs, Rs30 billion to flood victims in Sindh, and Rs6 billion to the Federal Board of Revenue (FBR). Similarly, it spent Rs14 billion on solarization, Rs23 billion on anti-terrorism initiatives, and Rs2 billion on technology upgrades. Likewise, the government also released Rs3.7 billion for the Reko Diq project, Rs520 million for Special Investment Facilitation Council (SIFC) and Rs7 billion for parliamentarians' schemes.
