Govt bound under IMF agreement to increase power tariff by 17%: Secretary Finance

[Naveed Yaseen]

* Finance secretary says govt needs to double employees’ salaries

By Sajid Chaudhry

ISLAMABAD: Finance Secretary Salman Siddique on Wednesday admitted before legislators that the government was bound under the International Monetary Fund (IMF) programme to pass the 17 percent increase in power tariff on to the consumers in phases.

The government was trying to convince the IMF and the World Bank not to enforce the conditionality, so consumers were saved from the additional power tariff burden. However, he revealed that gas tariff were being reduced from July 1, 2009 to provide relief to the consumers.

He was talking to senators on the Senate Standing Committee on Finance meeting, chaired by Senator Ahmed Ali, at the Parliament House.

The committee, however, recommended that the government reduce the subsidies and increase the tariff on power in phases spanned over the next few years instead of doing it during the next fiscal year.

Subsidy on power tariff would be withdrawn by 17 percent and tariff determination would now be conducted through the National Electric Power Authority’s automatic adjustment regime.

Salaries: To a question relating to the 15 percent salary increase for public sector employees in the budget for the fiscal year 2009-2010, the secretary said this was “interim relief” and recommendations of the Pay and Pension Commission were expected by November, adding that and a comprehensive package would be announced in December 2009.

“We need to double the salaries of government employees”, he admitted, adding that an additional sum of Rs 27 billion would be needed for the purpose.

While responding to queries regarding the difficulties faced by industrialists in NWFP and Balochistan due to the deteriorating law and order situation there, Siddique said a comprehensive rehabilitation plan was being finalised for infrastructure development and industrial revival of the two provinces.

This would be financed through the funds that are to be received from the United States under the Kerry-Lugar Bill, he said, adding that a special committee on NWFP was already working out the proposals for the plan and recently, another committee had been constituted for Balochistan also.

He said after the imposition of a fixed carbon surcharge on petroleum prices, the prerogative of the executive would go and an automatic price determination regime would become applicable on the products. He also advocated the imposition of carbon surcharge on CNG prices.

http://www.dailytimes.com.pk/default.asp...2009_pg7_6