Power tariff to be raised before June: Tarin

[Naveed Yaseen]

ISLAMABAD (January 27 2009): Advisor to Prime Minister on Finance Shaukat Tarin said on Monday that the government would increase the power tariff before June this year. He was talking to media men after the launching ceremony of conduct for members of Pakistan micro-financing network (PMFN).

He said that under the agreement with International Monitory Fund (IMF), the government was bound to eliminate subsidy on electricity, and added that there would be a nominal increase in the electricity prices, as the price of furnace oil in international market had dropped. "The increase in electricity prices would be made before June this year," he said.

The Advisor said that National Electric Power Regulatory Authority (Nepra) had allowed increase of 62 percent in electricity rates in November last year but the government passed on only about 18 percent to the consumers. He said that the government would pass on the impact of decline in global oil prices to the consumers and would consider reduction in oil prices next month.

He said that inflation was declining, and the main indicator, Consumer Price Index (CPI), had gone down by 1.34 percent during December as compared to previous month. "It is expected to decline further in January," he added.

He said that fiscal deficit during first half of the current financial year was recorded at 1.9 percent against the target of 2 percent. He said that there had been increase in income sources, and expenditures had been reduced. He said the decrease in fiscal deficit was possible due to decrease in current account expenditures, 27 percent increase in national income and reduction in development expenditures. Tarin said that the United States had cut $55 million from its annual support commitment of $156 million for war against terrorism to Pakistan after some alleged objections. "We are in touch with US government to release the blocked money, he said, adding that Pakistan had received $101 million from the USA during last week. He expressed hope that the country's balance of payments sheet would further improve on receipt of $700 million support during this quarter.

He said that the country would receive $500 million from the World Bank and $200 million from Asian Development Bank next month. "The country has already received $500 million loan from China and $100 million from Asian Development Bank, he added.

Regarding progress on 'Friends of Pakistan' front, Tarin said the Finance Ministry would submit technical proposals about identified areas requiring financing to Friend countries in February. Subsequently, the ministerial level meeting of Friends of Pakistan is scheduled to be held in middle of March this year, he added.

For Public Sector Development Program, the Finance Division had released Rs 100 billion in first half and around Rs 200 billion would be released in the second half of the current fiscal year, he said.

About development funds, he said that about Rs 400 billion development funds were still with the federal and provincial governments, "and we have asked them to utilise these funds on the priority basis". He said that there was no capacity to make utilisation of full PSDP allocation. He said that reduction in development releases had been made after consultation with the Planning Commission.

Earlier, the Advisor had delivered keynote address at the launching ceremony of 'Conduct for Pakistan Micro-financing Network'. He noted that Pakistan's microfinance sector had emerged as the second fastest growing sector in the world, with outreach expanding to 1.8 million clients. The Advisor on Finance said that the micro financing was the only way out of poverty and the government was committed to facilitate the sector.

He linked the Benazir income support program with micro financing and said that in future government would provide small funding to the beneficiaries of this program, provide them insurance cover and introduce skill development program.

Deputy Governor of the State Bank of Pakistan, Mansoor-ur-Rehman termed the signing of the code of conduct timely and a curtail initiative at a time when commercial banking was earning bad name for exploiting the clients.

PMFN Chairman Dr Rashid Bajwa in his address of welcome highlighted various features of Pakistan micro finance network (PMFN) and said that the network has about 1.9 million borrowers. He said that 45 percent network growth was recorded during last three years, and PMFN was currently operating in 92 districts. Earlier, PMFN representatives Aban and Mohsin Ahmad gave detailed presentation on the code of conduct for consumers. On the occasion, representatives from various micro finance organisations signed the code of conduct.

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