News Pulse (July 03, 2013) Rs66bn diverted to federal fund: ECC - TopicsExpress

News Pulse (July 03, 2013) Rs66bn diverted to federal fund: ECC allows 300,000 tonnes urea import (Dawn) The government on Tuesday diverted about Rs66 billion of funds under Universal Service Fund (USF) and Research and Development Fund (RDF) to the Federal Consolidated Fund and allowed import of 300,000 tonnes of urea. The decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the cabinet, presided over by Finance Minister Ishaq Dar. The meeting authorised the petroleum ministry to negotiate a government-to-government deal with Qatar for importing 500mmcfd of LNG. High money growth sparks inflation, liquidity fears (TN) The country’s money supply growth has experienced a sharp expansion of 12.66 percent during July 1, 2012 to June 21, 2013, heightening the risk of inflation and a severe liquidity crunch in the coming months, provisional data on monetary aggregates issued by the State Bank of Pakistan (SBP) revealed. The expansion in the country’s money supply also reflects a continuous rise in the borrowing needs of the government. The State Bank on Tuesday said that the broad money (M2) grew by almost Rs185 billion to Rs967 billion in July-June 2012-13 as compared to Rs782 billion over the same period last year. ‘Trade liberalisation with India could raise GDP by 1.5pc’m (TN) The economic growth could rise by 1.5 percent in 2014-15 if bilateral trade with India is liberalised, experts said. This was discussed during the first of a series of seminars to engage stakeholders from Pakistan and India on the way forward for trade normalisation. The seminar was organised by the commerce ministry and attended by senior diplomats from the South Asian Association for Regional Cooperation countries and industry and academia representatives. During the seminar, the commerce ministry discussed the research conducted by the Institute of Public Policy (IPP) of the Beaconhouse National University on the dynamics and impact of trade liberalisation between Pakistan and India. The IPP’s research was led by renowned economist Dr Hafiz Pasha. Reforms must to eliminate circular debt (TN) The injection of funds in the cash-starved energy sector to clear circular debt will not have a long-term impact unless reforms are imposed to permanently resolve the issue, analysts said. The government has settled outstanding dues worth Rs342 billion of the energy chain. “The fund injections are a short-term solution and will not have lasting implications on operational factors or returns to investors,” Zoya Ahmed at BMA Capital, said. “It would be best to recall the Rs82 billion TFC issued last year by the government in order to solve the power crisis. What happened next is not a mystery. Therefore, this one-time cash payment might help increase the power companies’ dividends once but sustainability will depend on reforms.” Cement export price to Kabul cut by Rs300/ton (Nation) he local manufacturers have slashed export price of cement to Afghanistan by around Rs300 per ton to keep their product intact in Afghan market as competition went high due to availability of cheaper cement there. As per industry sources, the cements exports to Afghanistan via Torkhum border had been halted due to the sufficient availability of cheaper Iranian cement in Kabul and surrounding regions. The dealers in Afghanistan were arguing to lower down the cement prices. With a view to resume cement export to Kabul, the industry decided to cut down the rates of their product by about Rs300 per ton so that competitiveness of Pakistani cement in Afghan market could be increased. Iranian cement replacing Pakistani product in Afghanistan. Government, IMF cut deal after protracted talks: formalities to be completed today (BR) The government claimed to have reached an understanding with the International Monetary Fund (IMF) for a new programme and for which a formal request is to be made today (Wednesday). A senior official of the Finance Ministry claimed that both the sides have reached an agreement on a new IMF programme, formalities to this effect regarding Letter of Intent (LoI) would be completed today (Wednesday). Finance Minister, Senator Ishaq Dar refused to speak to media persons standing outside Ministry of Finance after the talks with IMF delegation led by Jeffery Frank late in the evening saying "I did not invite you (media)". The new programme may be around $5.3 to $5.5 billion. Under provincial ST: 16 more sectors to be taxed (BR) The Punjab government has brought as many as 16 more sectors under the ambit of sales tax on services. The newly added sectors include services provided by software or IT-based system development consultants, technical/scientific and engineering consultants, other consultants, services provided by tour operators (other than Hajj and Umrah), manpower recruitment agents, services provided by the security agency, services provided in respect of mining of minerals, oil and gas including related surveys and allied activities. Besides, this services being provided by advertising agents, share transfer agents, business support services, services by property dealers, fashion designers, architects/town planners and interior decorators, rent a car, car/automobile dealers and services provided in respect of manufacturing or processing on toll or job basis (against processing on conversion charges) have also been brought under the scope of provincial sales tax. For further details contact: Hassan Amin [email protected] +9221-111-226-100 – Ext 702 Regards, Research Department Summit Capital (Pvt.) Limited Phone: +9221-111-226-100 Direct: 92-21-32467964 Fax: 92-21-32467959 Email: [email protected]