Govt set to announce two public holidays in a week

[LRE]

Govt set to announce two public holidays in a week




Saturday, August 23, 2008
Minister hints at cut in CNG prices by Rs6 per kg

By Khalid Mustafa

ISLAMABAD: The government, facing a liquidity crunch, is all set to announce two weekly holidays in its next cabinet meeting to stave off the rising petroleum bill, Finance Minister Naveed Qamar said during a chat with a select group of journalists here on Friday.

"This will help combat the escalating oil import bill, which is adversely affecting the current account deficit. We want to discourage the use of oil, especially high-speed diesel (HSD), in the country and two weekly holidays is a step in this regard."

The minister also hinted at reduction in the CNG price by Rs 6. However, he said a final decision will be taken by the Ogra very soon. The decision of two weekly holidays, the minister stressed, would be taken in line with the multi-pronged strategy the government had adopted to deal with the widening trade and fiscal deficits and the fast depleting foreign



reserves. Moreover, the government is also going to impose regulatory duty on the export of high-speed diesel to Afghanistan to offset the impact of subsidy it is extending on the HSD.

Apart from oil import, the government is also vigorously working to impose a sizeable duty on the import of non-essential and luxurious items to contain the overall import bill. "Duty has been imposed on the import of a lot of items. However, it would be well within the WTO-bound rates.”

The minister said the government had already placed 35 per cent duty on non-essential and luxury items. In addition, financing for the Public Sector Development Programme (PSDP) has also been reduced by Rs 100 billion.

"The government, in a bid to reduce the current expenditure, has also placed a ban on all kinds of purchases. It has also imposed immediate ban on unnecessary official foreign tours and visits abroad and this directive also applies to visits by important people accompanying the prime minister. Unnecessary persons would not be included in the visits.

"It has also been decided not to accord approval to supplementary grants in a bid to contain the current expenditures well within the budgetary limits," the minister vowed. Explaining the massive cut of Rs 100 billion in the PSDP, the minister said it did not mean that the government would drop some development schemes. Rather, the said schemes would be funded either by the private sector or through the public-private partnership.

"The government will not borrow from the State Bank in future. It would utilise other tools to arrange capital for bridging the financing gap, including introduction of new instruments in the National Savings Schemes, floating of Treasury bills, etc."

The minister hoped to mop up Rs 100 billion from these measures. On the fast-depleting forex reserves, the minister said the government was mulling to float the Workers Remittances Securitisation Bond worth $750-800 million to provide cushion to the worsening foreign reverses situation.

"Besides, two installments each of $136 million from the UAE-based Etisalat against the PTCL privatisation proceeds are now overdue and the government is expecting $272 million, most probably in the next month."

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