Latest news with #Rs330
Express Tribune
22-03-2025
- Business
- Express Tribune
Govt moves to abolish hidden subsidies
The government on Monday approved to transfer Rs330 billion worth subsidized export financing schemes from the central bank to the federal exchequer as part of its commitment with the International Monetary Fund to abolish hidden subsidies and bring transparency. The Economic Coordination Committee (ECC) of the cabinet took the decision to move the long-term financing facility from the State Bank of Pakistan's balance sheet to the Export-Import Bank (Exim) bank. The ECC also approved Rs1 billion subsidies for financing the scheme for the remainder of this fiscal year. Finance Minister Muhammad Aurangzeb chaired the ECC meeting. Under the $7 billion bailout package, Pakistan has assured the IMF that it would end the central bank's involvement in the refinancing schemes and completely transfer these schemes by the year 2028. With the fresh decision, about 30% of the total subsidized schemes are being shifted to the Exim Bank. A Finance Ministry handout stated that the ECC discussed a summary presented by the Finance Division regarding the phasing out of the State Bank of Pakistan's long-term financing facility (LTFF) to Exim Bank. The ECC decided that the SBP's LTFF portfolio of Rs330 billion would be phased out to the Exim Bank, with an allocation of Rs1 billion through a Technical Supplementary Grant to meet the LTFF subsidy requirement for the new portfolio for FY 2025. The long-term facility is offered to the exporters at 3% lower than the policy rate and the government also pays 2% interest cost to the Exim bank for managing the scheme. According to the Memorandum for Economic and Financial Policies (MEFP), the government has assured the IMF that it will refrain from involvement, or influence in, decisions allocating credit. It will also refrain from sectoral disbursement targets and instead accelerate work to remove barriers to credit in the respective sectors. Till a few years ago, the central bank was highly subsidizing the Export Facilitation Scheme and the Long-Term Financing Facility, which had made the tight monetary policy ineffective and created monetary transmission issues. The government was required to prepare an action plan for better targeting of the subsidized schemes by end-December 2024 and starting its implementation by end of this month. The IMF had been informed that the commercial banks have managed the transition smoothly and capacity at Exim Bank has been strengthened sufficiently. The commercial banks are handling the Export Finance Scheme from their own liquidity but the Finance Ministry is paying the interest rate differential from the budget. In addition to handling the Rs330 billion transferred portfolio, the Exim Bank will also handle a fresh long-term financing portfolio of Rs210 billion, bringing the total size of these subsidized loans to Rs540 billion. The taxpayers will bear the subsidy cost of Rs91.5 billion on the total Rs540 billion portfolio till the year 2036 when these loans would mature. The ECC also approved a summary from the Ministry of Information and Broadcasting, seeking a supplementary grant of Rs2 billion from its allocated budget of Rs5.6 billion. The approved grant will be used to meet the liabilities of payments for outstanding advertisement dues owed to media houses, according to the Finance Ministry. The ECC further approved a proposal from the Ministry of Defence for a supplementary grant of Rs430 million for the execution of schemes in the province of Punjab during the current financial year. The Committee also approved the allocation of Rs250 million as the government's paid-up capital for the operations of the Jinnah Medical Complex & Research Centre (JMC&RC) Company. This allocation will support the establishment of a state-of-the-art, 1,000-bed academic medical centre in Islamabad, it added. However, the ECC directed the company to provide a detailed breakdown of the expenditures and activities to be covered by the approved Rs250 million before seeking further allocations. The ECC also approved a summary from the Finance Division for a supplementary grant of Rs24.6 million or $87,671at an exchange rate of Rs280.1 per dollar to Mrs. Lia Bomba of JAED Textile Pvt Ltd, Sydney, Australia, in compliance with the instructions of the Supreme Court of Pakistan.
Express Tribune
04-03-2025
- Business
- Express Tribune
Punjab Auqaf stuck in a raw deal
The monthly rent of commercial shops, houses and offices located in the business centers of Lahore, especially in areas like Anarkali and Neela Gumbad, is at least Rs0.1 to Rs0.2 million for a one to two marla area. Surprisingly, in the same areas, there are the properties of the Punjab Auqaf Department and other state departments, which are given on rent for just a few thousand rupees. Several properties of the Punjab Auqaf Department in the Jallo Mor area of Lahore have been rented by local shopkeepers for many years; however, the tenants of these properties only pay a few thousand rupees to the government per month even though they collect a much larger amount themselves from their own lessees. Such a situation is not only seen in Lahore but in all districts of Punjab, where the properties of the Punjab Auqaf and other government departments, including shops, residential houses and agricultural land worth billions of rupees, are often given on rent at measly rates. Civil society representative and lawyer, Abdullah Malik believed that the rents of government properties should also be according to the market value but unfortunately, this does not happen. 'The rents of the properties of the Evacuee Trust Property Board, Azad Jammu and Kashmir, Auqaf Department and other departments are very low compared to the market rate. In fact, many properties are occupied. For instance, there are many tenants in the Shah Chirag Building adjacent to the Lahore High Court on Mall Road who may not even pay rent. These properties should be auctioned, and their lease period also needs to be reduced,' said Malik. According to the details received by Express Tribune, the notified area of Punjab Auqaf Organization is more than 74,964 acres, of which 29,907 acres five kanals and 11 marlas are cultivable while 45,056 acres, four kanals and three marlas are uncultivable. Similarly, there are 1,426 residential houses, 6,179 shops and 590 other properties, all of which have been given on monthly rent/lease by the department. Although these properties should have an annual rent amounting to Rs568,368,000, during 2024, the department was able to collect only Rs330,231,547 since the rents of these properties are less than the market value. The rent of shops attached to Jamia Masjid Neela Gumbad is Rs100 per square foot, while the rent for shops in Jamia Masjid Hanafia Farooqia Islampura is Rs65 per square foot. Similarly, the rent of shops in Jamia Masjid Peshawari is Rs130 per square foot, and in Jamia Masjid Tajdara Ambia Sabzazar, it is Rs150 per square foot. Likewise, the rent of properties at Jamia Masjid Madina Purani Anarkali is Rs150 per square foot while the rent of shops at Jamia Masjid Aali Nawan Kot is Rs60 per square foot. Punjab Auqaf Secretary Dr Tahir Raza Bukhari claimed that the rents of the Waqf properties were in accordance with the rates fixed by the concerned Deputy Commissioner/District Administration however, they wanted to bring the rents of these properties up to the market value. 'Proposals in this regard have been prepared and sent to the provincial cabinet. Similarly, land in some cities will be leased under public-private partnerships,' informed Dr Bukhari. Reportedly, Punjab Auqaf has now decided to fix the rents of its properties according to the market rate, with 25 per cent imposed every three years and new rents after six years.
