Pakistan Economy - News & Updates - Archive

[Owais]

Rs70 million Swiss grant for free and fair Elections in Pakistan


ISLAMABAD (updated on: November 30, 2006, 17:09 PST): The Country Director of the Swiss Agency for Development and Co-operation (SDC), Mr. Denis Bugnard and the Representative of The Asia Foundation (TAF), Mr. Hamid L. Sharif, signed on Thursday a bilateral agreement towards the realisation of the two-year joint-donor program 'Supporting Free and Fair Elections in Pakistan' to be executed by TAF.

Under this agreement, the Government of Switzerland will provide a contribution of 1.15 million US dollars (70 million Pak Rupees) to the basket-funded program.

The purpose of this program is to promote an active and educated voting population and to ensure an efficient voting process in Pakistan.

The Program will provide support to a network of 30 civil society organisations, called the "Free and Fair Elections Network" (FAFEN), to build the capacity of the civil society and increase citizens' participation in the political process.

Funds will be used for civic education; awareness raising; training of teachers for first-time voters' education program; domestic monitoring of the elections; as well as training of the media and religious leaders.

The program will be implemented in 110 Districts and 6100 Union Councils in Pakistan and shall complement other efforts of the donor community to address issues relating to the next general elections.

 

[Owais]

Vision-2030 envisages prosperous Pakistan: Prime Minister

KARACHI (November 30 2006): Prime Minister Shaukat Aziz has said that in its Vision-2030, the government envisages a developed, industrialised, just and prosperous Pakistan through rapid and sustainable development to meet the needs of an increasing population by deploying knowledge inputs.

In a massage on the occasion of launching of the Business Council for Sustainable Development (BCSD) Pakistan, he said BCSD Pakistan can immensely contribute to realisation of this vision by engaging business in the quest for sustainable development in the country.

"I am very pleased to learn about the forthcoming Launch of the Business Council for Sustainable Development Pakistan (BCSD Pakistan) in Karachi under the leadership of PSO and PIA", he said and expressed the hope the BCSD Pakistan would be part of the global network of the World Business Council for Sustainable Development, Geneva, Switzerland, which would provide it access to extensive intellectual capital, leading edge thinking and best corporate practices.

He said that there was a growing awareness regarding the role that business could play in creating and maintaining a sustainable environment that stroke an effective balance between economic growth, social progress and ecological efficiency.

He was optimistic that BCSD Pakistan would play an important role in meeting the sustainable development challenges in Pakistan.

 

[Owais]

UK pledges £5 million aid for PRSC programme

ISLAMABAD (November 30 2006): The United Kingdom (UK) would provide a technical assistance of £ 5 million (Rs 585 million) to support the implementation of Pakistan's Poverty Reduction Support Credit (PRSC) programme.

In this regard, a memorandum of understanding (MoU) was signed by Dr Yusaf Samiullah, head of the UK Department for International Development (DFID) in Pakistan and Dr John Wall, country director, World Bank, here on Wednesday.

The fund will be used to support the development, implementation and monitoring of policies that support Pakistan's poverty reduction strategy. This includes targeting the poor and vulnerable, promoting growth and macroeconomic stability and supporting a governance framework that will enable better health and education services.

"I am pleased to sign this memorandum of understanding with the World Bank in support of the Government of Pakistan's own programme to reduce poverty. The Government of Pakistan has made good progress in reducing poverty. But more needs to be done to lift the 38 million people still living below the national poverty line out of poverty", said Dr Samiullah.

"Supporting the Government of Pakistan in this way is just one of a number of UK and World Bank programmes designed to support poverty reduction. Looking forward, I am happy that we will double our own programme from Rs 27.6 billion (£ 236 million) for the current period 2005-08 to Rs 56 billion (£ 480 million.) for the period 2008-11."

"A new Country Assistance Plan will be developed over the coming months to set the framework for using these extra resources, with consultations starting in Pakistan very soon. Our partnerships with the government, civil society, and other donors such as the World Bank will be even more vital as we work together to support Pakistan's progress towards the millennium development goals (MDGs)", he said.

"I am looking forward to working closely with the Government of Pakistan and DFID in pursuit of the outcomes detailed in Pakistan's Poverty Reduction Strategy", said World Bank Country Director John Wall. "This is a good example of the kinds of partnership that can make a real difference", he added.

 

[Owais]

Sailkot Chamber hails signing of FTA with China

SIALKOT (November 30 2006): The local exporters and traders have hailed the free trade agreement (FTA) between Pakistan and China and termed it a historic event in the history of the country.

In an interview with Business Recorder here on Wednesday, Sialkot Chamber of Commerce and Industry (SCCI) President Sheikh Abdul Waheed Sandal said the FTA between the two countries would not only further cement the existing friendly ties but also help boost industrial production and expand trade relations between the two countries.

Waheed Sandal said the agreement would promote economic co-operation and expand boundaries of trade between Pakistan and China. There was a vast scope for the Chinese private sector to invest in various trade fields of Pakistan, including sports goods, surgical instruments leather goods industries of Sialkot.

The FTA between the two friendly countries would help bringing closer the business communities of Pakistan and China and ensure the frequent exchange of trade delegations, which would also help in understanding each others viewpoint for exploring possibilities of joint ventures and investment, he was of the opinion.

The SCCI president said there were bright opportunities for Chinese businessmen for establishing industries in Sialkot Export Processing Zone (SEPZ) as well as establish joint ventures with local businessmen. Abdul Waheed termed the signing of FTA an historic event and said that it was a symbol of deep friendship and love between Pakistan and China.

 

[Owais]

S&P assigns 'BB' rating to Pakistan long-term bonds

KARACHI: Standard & Poor's Ratings Services today assigned its 'BB' long-term local currency debt rating to two Pakistan Investment Bonds.

The bonds issued by the country, totaling Pakistani rupees 7.0 billion (US$117 million), were issued on Oct. 31, 2006.

These newly rated bonds with maturities of 15 and 20 years carry coupon rates of 10.0% and 10.5%, respectively.

The 'BB' rating has also been assigned to three other Pakistan Investment Bonds with maturities of three, five, and 10years and with coupon rates of 9.1%, 9.3%, and 9.6%, respectively, totaling PKR10.9 billion (US$181.7 million), which were issued in May 2006.

"The ratings on Pakistan reflect sharp declines in the government's external debt indicators and structural improvements that, over time, should help Pakistan's integration into the global economy, and secure a higher growth path," said Standard &Poor's credit analyst Agost Benard.

"Extensive micro economic reforms over the past several years have improved Pakistan's growth prospects, such that real GDP growth of about 7% is a real possibility in the medium term."

Looking ahead, the ratings could improve if the government can expand its recent tax reforms to widen the tax base and raise government tax revenues significantly from the current low level of 10.4% of GDP.

The country's credit standing could also improve if the authorities can demonstrate that the current pro-market, pro-growth set of policies will be sustained during successive administrations.

 

[Neo]

Again I have deleted a few posts from this thread to avoid flooding with insignificant news.

Please be selective, post only stuff that would attract readers and avoid flooding.

What we want to see in this thread is news concerning:
1-development
2-FDI
3-growth and analysis

Thanks,
Neo

 

[Neo]

WB, DFID to spend Rs585 million for poverty elevation in Pakistan

ISLAMABAD: November 30, 2006: The Department for International Development (DFID) and World Bank will jointly spend 585 million rupees for poverty elevation in Pakistan.

In this regard, Memorandum of Understating had been signed between World Bank and DFID.

The amount will be spent on the projects of Micro Finance, Education and Health.

 

[Neo]

PM says macro economic situation robust in all sectors

ISLAMABAD: November 30, 2006: Prime Minister Shaukat Aziz has said that the overall macro economic situation in the country continues to be robust with every sector of the economy including agriculture, industry, services and investment showing encouraging trends.

The prime minister observed this while addressing the Executive Committee of the National Economic Council (ECNEC) meeting here on Thursday.

The prime minister said the high growth exhibited by all sectors of economy during the first quarter of the financial year is a result of the focused approach to development adopted by the government and manifestation of the solid foundation laid for a high growth trajectory for future.

He said the sound macro economic policies, wide ranging structural reforms, consistency and continuity in policies have transformed Pakistan from a fragile to a resurgent economy.

The growth momentum that Pakistan sustained has underpinned by dynamism in industry, agriculture ad services and the emergence of a new investment cycle supported by strong credit growth.

The prime minister said that that the 7 percent growth was achieved last year and the GDP growth during the current year is expected to be higher than targeted and range between six to eight percent.

He said the share of industrial and manufacturing sector towards overall GDP has increased from 18.21 percent in 2001-2002 to 26 percent in 2005-06 and 15.5 percent in 2001-02 to 18.2 percent in 2005-06 respectively. Large scale manufacturing sector during the first quarter of the current year have shown a double digit growth, the prime minister said.

Aziz said foreign direct investment (FDI) during first quarter of the year has already touched a record level of $1.236 billion showing an increase of 158 percent over the same period of last year. He said more investment is expected to come as a result of a number of agreements signed with foreign countries and private sector enterprises to enhance economic, industrial co-operation and trade promotion.

The prime minister said tax collection is right on the target and in the first four months (July-October) of the current fiscal year Rs 236.5 billion have been collected which is 17.5 percent higher than the last year.

He said that core inflation is showing a declining trend as a result of the steps taken by the government, prices of essential commodities remained stable during Ramazan.

Aziz said consumer spending has been boosted by both structural and cyclical factors, all vital economic indictors are positive and despite several negative indicators around the world. Pakistan has achieved progress and its standing in the international community has also immensely strengthened.

The prime minister said that on the basis of strong economic fundamentals and declining debt burden Moody's international rating agency has upgraded Pakistan from B2 to B1.

The prime minister said the ambitious and highest ever PSDP of Rs 470 billion approved by the government is a manifestation of its commitment to development of the country and prosperity of the population. Timely implementation and execution of the projects are the challenges which the government is trying to overcome the prime minister pointed out.

Aziz said the ECNEC will review projects in the areas of infrastructure strengthening commerce, education, energy, health, higher education, industry, physical planning ad housing rural development areas development and transport and communication.

 

[Neo]

Thursday, November 30, 2006

Govt mulling fund to increase manpower export

* The proposal is to be discussed at ECNEC meeting today
* ECNEC will also consider 33 projects costing Rs 86b

By Fida Hussain

ISLAMABAD: The government is considering setting up a fund for marketing skilled workforce in different countries.

The proposed fund is expected to help the government increase manpower export that will ultimately increase the volume of foreign remittances, a senior government official told the Daily Times on Wednesday.

A proposal in this regard will be discussed at the meeting of the Executive Committee of National Economic Council (ECNEC) on Thursday with Prime Minister Shaukat Aziz in the chair. The planning body will also consider approval of 33 development projects with a total cost of around Rs 86 billion.

The government has realized that most of the workforce being exported by Pakistan, especially to the Gulf countries, is raw hand and their earnings is much lower than wages of workers from other countries, especially India, Sri Lanka and some others, whose nationals have been capturing high posts in the public and private sector entities of those countries.

The government has asked the ministry of labour, manpower and overseas Pakistanis and the Planning and Development (P&D) Division to inform the government about the the present strength of Pakistanis in different countries and their professions. According to initial estimates, around four million Pakistanis are in different countries. These Pakistanis have gone to foreign countries with the help of various schemes of the government. The number of Pakistanis in other countries who are there by using schemes of the private sector could be around 2-3 million.

The official said Pakistan’s workforce export is not at all properly managed and this is the main reason which deprives Pakistan of getting maximum benefit from Pakistanis working in foreign countries. The government will seek help from well-off Pakistanis in different countries to donate to the proposed fund. A matching amount will be contributed by the government, the official said.

Apart from this proposal, ECNEC will consider the ministry of railways’ scheme of special repair of 36 GMU 30 diesel locomotives with cost being revised from Rs 4.5 billion to Rs 1.6 billion, expansion of network of the Utility Stores Corporation of Rs 784 million, construction of office building for the National Accountability Bureau costing Rs 900 million and land acquisition for new Gwadar International Airport of Rs 1.05 billion.

ECNEC will also consider the scheme of Electric Power Transmission Enhancement Project costing Rs 12.6 billion, electrification of 7,000 villages in Balochistan that will cost Rs 1.034 billion. The project will be completed in two years. The AJK Community Infrastructure & Service Program in the earthquake-affected areas at a cost of Rs 2.4 billion. The project will be completed in two years. The planning body will also consider the project of Lower Indus Right Bank Irrigation and Drainage Programme (RBOD) the cost of which has been increased from Rs 4.3 billion to Rs 14.7 billion.

The project of Sabakzai Dam Project, whose cost has been revised from Rs one billion to Rs 1.58 billion will also be taken up by ECNEC. The project of Land Acquisition and Resettlement of Kurram Tangi Dam whose cost has been reduced from Rs 2.7 billion to Rs 931 million, the Sindh Coastal Community Development at a cost of Rs 2.4 billion, Food Security and Productivity Enhancement of Small Farmers in 1,012 villages at a cost of Rs 8.01 billion, Operationalization of Sheikh Khalifa Bin Zayed Hospital in Quetta at a cost of Rs 497.2 million, 1,000 Cuban scholarships for studies in general comprehensive medicines equal to MBBS that will cost Rs 792.6 million, Trade & Transport Facilitation Project-2 of Rs 1.5 billion, and Competitive Support Fund of Rs 2.9 billion to provide support fund to SMEs.

 

[Neo]

Thursday, November 30, 2006

Pakistan’s poverty reduction plan: MoU signed to provide Rs 585 million support

ISLAMABAD: Dr Yusaf Samiullah, Head of the United Kingdom’s Department for International Development (DFID) in Pakistan and Dr John Wall, Country Director of the World Bank, Pakistan Wednesday signed a Memorandum of Understanding for DFID to provide up to Rs 585 million (£5 million) worth of technical assistance to support the implementation of Pakistan’s Poverty Reduction Support Credit (PRSC) programme.

DFID would double its assistance program from Rs 27.6 billion (£236 million) for the current period 2005-2008 to Rs 56 billion (£480 million) for the period 2008-2011. In this regard a new country assistance plan would be developed over the coming months to set the framework for using these extra resources, with consultations starting in Pakistan very soon.

The Rs 585 million (£ 5 million) worth of technical assistance would be used to support the development, implementation and monitoring of policies that support Pakistan’s poverty reduction strategy. This includes targeting the poor and vulnerable, promoting growth and macroeconomic stability and supporting a governance framework that will enable better health and education services for the country.

“I am pleased to sign this Memorandum of Understanding with the World Bank in support of the government of Pakistan’s own programme to reduce poverty. The government of Pakistan has made good progress in reducing poverty. But more needs to be done to lift the 38 million people still living below the national poverty line out of poverty, said Dr Samiullah.

He further said that supporting the government of Pakistan in this way is just one of a number of UK and World Bank programmes designed to support poverty reduction. Looking forward, I am happy that we will double our own programme from Rs 27.6 billion (£236 million) for the current period 2005-2008 to Rs 56 billion (£480 million) for the period 2008-2011.

A new country assistance plan will be developed over the coming months to set the framework for using these extra resources, with consultations starting in Pakistan very soon. Our partnerships with government, civil society and other donors such as the World Bank will be even more vital as we work together to support Pakistan’s progress towards the Millennium Development Goals, he told.

Replying to the questions, Dr Samiullah said that helping Pakistan in its efforts to reduce poverty is major focus of DFID. In this regard, the DFID is extending its support to Pakistan in combating TB, HIV-AIDS, polio eradication and malaria in the health sector, provincial management reforms programs, water and sanitation, maternal and new born health. He further informed that UK’s DFID would start the Women Micro Finance programme to help 25000 households with small credit programmes for their economic empowerment with an assistance of 2.5 million this year, which would be increased, to 10 million in future.

“I am looking forward to working closely with the government of Pakistan and DFID in pursuit of the outcomes detailed in Pakistan’s ‘Poverty Reduction Strategy”, said Dr. John Wall, Country Director of the World Bank, Pakistan. “This is a good example of the kinds of partnership that can make a real difference.”

Replying to a question relating poverty figures, World Bank Country Director John Wall validated the government’s claim of reduction in poverty by 10 percent during 2001 to 2004 period and said that World Bank was also represented in the government of Pakistan’s vetting committee headed by deputy chairman planning commission constituted to validate the poverty reduction estimates.

He said 10 percent reduction in poverty was a major achievement of Pakistan. He-however, said that poverty in Pakistan is rural phenomena and coverage of the consumer price index should be expanded to more and more rural areas so that more reliable data is available for any comparison.

 

[Neo]

Hi-tech a must to stay competitive: economists

KARACHI: Pakistani industrial sector is developing, but is focusing on low-tech/low-value manufacturing and it must move to hi-tech/high value added production in order to stay competitive in the world markets.

This was the crux of speeches delivered by two Japanese economists at a seminar here on Wednesday. The seminar was held to present a report entitled “Towards a Vision 2030: Direction of Industrial Development in Pakistan” prepared by Japan International Cooperation Agency.

Prof Hisaki Mitsui, who is senior economist at International Development Centre of Japan, said in his presentation that several sectors, such as textile and automobile, could possibly become leading industries to enable the country achieve the targets set in Vision 2030.

He said that an effective and strong coordination mechanism at the government level was highly needed, particularly for small and medium enterprises.

There was a need to improve relationship between private and public sectors, he said, but pointed out that mistrust between the two parties was deep-rooted in some sectors.

Mitsui suggested that the private sector should strengthen institutional capability of business associations to become a reliable counterpart of the government. On the other hand, the government should keep listening to the voice of the private sector, he said.

Development of own designs, brand names as well as strengthening of distribution and marketing channels should be encouraged, he said.

He identified textile, food processing and automobile as the three sectors, which could lead the industrial growth in the country. He said the information technology sector in the country was mostly services-based and did not focus on manufacturing.

He said the competitiveness of housing-related industry after current construction boom was questionable.

He said the competition with Chinese products should become tougher, but it was important to avoid direct competition with Chinese manufacturers.

Hisaya Oda, who is Assistant Director at Institute of Developing Economics, said that Pakistan was attracting less foreign direct investment than its potential. The FDI inflow to Pakistan had been rising, but the rise was smaller in comparison with the progress made by other Asian countries in that respect, he said.

Particularly, the FDI flow to manufacturing sector was limited, while other Asian countries had successfully attracted FDI into that sector. Manufacturing sector had a share of 67.40 per cent in FDI attracted by China, 26.2 per cent in India and over 69 per cent in Thailand. In Pakistan, it was hardly around nine per cent.

He said low-tech products constituted 72.7 per cent of total Pakistan’s exports whereas the share of medium and hi-tech exports in the total world exports was 54.7 per cent.

 

[Neo]

US Congress to discuss setting up ROZs in Pakistan

ISLAMABAD: The US authorities have formally conveyed to Pakistan that US Congress will take up by January-end the setting up of Reconstruction Opportunity Zones (ROZs) in Pakistan for legislation. “Secretary Commerce Syed Asif Shah told this in a high level meeting held with Prime Minister Shaukat Aziz in the chair here on Wednesday, during his presentation on progress on the ROZs,” informed sources told The News.

US President George W Bush during his visit to Pakistan had proposed the Reconstruction Opportunity Zones in tribal areas of Pakistan particularly between Pakistan and Afghanistan in a bid to alleviate poverty, which has become the source of the deadliest spate of ‘terrorism’ in the world.

The sources while quoting the proceedings of the meeting said that Commerce Ministry is actively pursuing the proposal to set up ROZs with the US authorities and it is hoped that legislation on the programme including the exact locations of the ROZs and products to be manufactured there will be finalised soon between the Pakistani and the US authorities.

According to a press release issued here, Prime Minister Shaukat Aziz has said the Reconstruction Opportunity Zones (ROZs), being set up in different areas of the country including tribal areas, Balochistan, earthquake affected areas and the commercially dispersed zones of the country, will help alleviate poverty, improve living standards and contribute to overall economic uplift of these areas.

The PM said that ROZs would greatly transform the less developed areas by strengthening infrastructure, generating economic activities and creating more jobs and better facilities of life for the people of these areas.

He emphasized the need for providing skill training to the people of the areas where ROZs are to be set up to improve their prospects for getting employment.

He said the entire physical infrastructure and support system including transport connectivity and supply of essential services to these areas will be strengthened to attract investments and facilitate efficient functioning of the industrial units set up in these areas.

Earlier, Secretary Ministry of Commerce made a presentation to update the meeting on progress of the programme. The meeting was attended among others by Minister for Commerce Humayum Akhtar Khan, Minister for Industries and Production Jehangir Khan Tareen, Minister for Culture Ghazi Gulab Jamal and senior officials.

 

[Neo]

Russia shows interest in coal power plant

KARACHI: Russians have showed interest in coal mining and setting up of coal-fired power plants in Sindh. In this regard a Russian delegation, headed by Chairman Board of Russian Institute of Coal Industries, held a meeting with Provincial Minister for Mines and Mineral Development, Irfanullah Khan Marwat here on Wednesday.

The delegation informed the minister about their large-scale investment plans in coal mining and power plants in Sindh and sought government cooperation in this respect.

The minister welcomed the delegation for investment in Sindh and said that Pakistan and Sindh governments would extend all cooperation to them.

He pointed out that at present very large coal reserves exist in Thar area and told them to first visit Thar and then Sonda, Jheruk and Thatta and select the site of their choice for initiating the work.

He informed the delegation that in Thar, roads are ready, sweet water exists, telephone facility is available besides a small airport has been constructed and a hotel is under construction.

Marwat said a Chinese company is already working on coal mining project in Thar while another Chinese company is setting up a power plant in Sonda, Jheruk on which they will start work from December 6.

He told the delegation that companies of various countries are showing interest in coal power plant and mining in Sindh. He said these projects would result in meeting power shortage and reducing unemployment.

He said these projects would entail large-scale investment, which will result in massive development in Sindh.

Secretary Mines, Abdul Hameed Akhund and DG Coal Development Authority Abbas Ali Shah were also present in the meeting.

 

[Neo]

India and Pakistan Reject Gas Price Devised by Iran
Thursday, November 30, 2006

India and Pakistan have rejected the gas import price worked out by a consultant company appointed by Iran as part of the over US$7 billion tri-nation pipeline project.

"The price worked out by the consultant, which was based on certain parameters given by Iran, was not acceptable to India and Pakistan. The consultant has been given revised parameters to work out the gas pricing," Oil Minister Murli Deora said in a written reply to a question in Rajya Sabha (the upper house of parliament), Indian media reported.

Iran had appointed Gaffney Cline and Associates to work out a price formula for the gas Iran wants to sell to the two South Asian neighbors.

While Deora did not elaborate, sources said the Iranian side had asked the consultant to work out the gas price with future LNG contracts as reference point.

New Delhi had, however, wanted the reference to be LNG contracts entered into during the past few years, which could then be extrapolated to produce crude oil prices.

"Since the basis of arriving at the formula was not acceptable, we did not go into the GCA's suggestion," an official said.

At the last trilateral meeting in New Delhi on August 3-4 Tehran had wanted a price equivalent to 10 percent of ruling Brent crude oil price, plus a fixed cost of $1.2 per million British thermal unit (mBtu).

At $60 per barrel, the average Brent price during recent times, this translated into a price of 7.2 dollars per mBtu at the Iran-Pakistan border.

Added to this would be the cost of transporting the gas through Pakistan.

New Delhi, however, was willing to pay no more than 4.25 dollars per mBtu for gas delivered through the 2,100-km line at its border, sources said.

http://www.rigzone.com/news/article.asp?a_id=38631

 

[Owais]

Budget deficit widens to Rs 86.69 billion

ISLAMABAD (December 01 2006): Pakistan's budget deficit has widened to Rs 86.69 billion (one percent of GDP), up by 50 basis points, or 0.5 percentage point in the first quarter (July-September, 2006) as compared to Rs 37.697 billion (0.50 percent of GDP) recorded in the corresponding period of the last fiscal, the Ministry of Finance reported on Thursday.

According to the latest data released by the ministry of Finance on 'consolidated federal and provincial budgetary operations' for July-September 2006-07, government's total expenditures stood at Rs 342.364 billion, including unidentified expenses of Rs 33.047 billion whereas its revenues totalled at Rs 255.672 billion.

This big increase in the budget deficit in absolute and percentage terms during the first three months of the new fiscal would force the government to expand its external and domestic borrowing to bridge the deficit gap.

Its interesting feature is that during the last three-quarters of the FY2005-06, GDP remained constant at Rs7.465 trillion while in the fourth quarter it suddenly leapt to Rs7.713 trillion and now in the first quarter of the new fiscal 2006-07, it grew to Rs 8.808 trillion.

It is pertinent to note that out of the total expenses, the government spent only Rs 67.46 billion or 21.8 percent for the Public Sector Development Programme (PSDP). A huge sum of Rs 244.16 billion or more than 79 percent was consumed by current expenditures. The defence expenditures were Rs 54.57 billion during this period.

After analysing and comparing the fiscal data of the first quarter with that of year-ago, two important indicators emerged. First, the budget deficit is higher than what it was - one percent against 0.50 per cent of the GDP. Secondly, the amount of unidentified expenses is much greater than what it was - Rs 33.047 billion against Rs 3.881 billion recorded during corresponding quarter of last fiscal.

On the positive side, the expenditure on three-month PSDP during the period of this fiscal is higher than the same period of the last fiscal. This indicates a change for better in government's policies but much depends on the actual utilisation of the PSDP allocations. The actual utilisation of the PSDP in the first three months of the fiscal year was about only 78 percent.

CURRENT EXPENSES: Within the current expenses of Rs 244.163 billion in July-September 2006-07, Rs 97.80 billion went to general public services of the federal government, including Rs 49.09 billion on domestic debt servicing and Rs11.22 billion on foreign debt servicing.

The defence sector devoured Rs 45.57 billion, expenses on public order and safety affairs ate up Rs 4.03 billion, and economic affairs consumed Rs 7.93 billion. The government somehow managed to spend Rs 3.677 billion (0.04 percent of GDP) on education affairs and services, but the most vital health sector received only Rs 903 million. Worse still, the government spent only Rs 139 million on social protections (direct relief to the poor) and a negligible sum of Rs 32 million on environmental protection.

The Rs 903 million spending on the health sector means this sector's share in the overall current expenses was 0.36 per cent (0.01 percent of GDP) in the first quarter of this fiscal. Similarly, Rs32 million spending on environmental protection comes to 0.013 per cent of total current expenses.

According to the data the federal revenue collection during the first three-month was Rs 255.672 billion. Rs 191.62 billion were tax collection. The non-tax revenues stood at Rs 64.052 billion during the July-September period of FY 2006-07. Out of non-tax revenue, Rs 13.558 billion were collected in lieu of petroleum and gas surcharges that include Rs 7.556 billion as petroleum development surcharge and Rs 6.00 billion from gas development surcharge.

TRANSFERS TO PROVINCES: The data further say that the federal government has transferred Rs 78.539 billion to the four federating units (Punjab, Sindh, NWFP and Balochistan).

The provincial revenues of the government of Punjab amounted to Rs 45.54 billion against the expenditures of Rs 59.54 billion during the July-September period of the FY 2006-07. Punjab received Rs 37.21 billion as revenue share from federal taxes as NFC Award share during this period under review.

The total revenue of the government of Sindh stood at Rs 31.77 billion and the total expenditures of the province remained at Rs 29.54 billion during the period. It received Rs 26.23 billion as revenue share.

NWFP total revenues amounted to Rs 12.49 billion and total expenditures of the province stood at Rs 13.80 billion. The NWFP government received Rs 8.72 billion from the federal government during the said period.

The total revenue of the government of Balochistan stood at Rs 8.88 billion and the total expenditure of the province remained at Rs 8.79 billion during this period of the current fiscal year. The provincial government received a sum of Rs 6.38 billion from the federal government.