Prices have gone sky high, admits PM

ISLAMABAD: Members of the cabinet came down hard on Minister for Finance Abdul Hafeez Shaikh on Wednesday during the federal cabinet meeting over rising prices as Prime Minister Raja Pervaiz Ashraf also expressed serious concern over the rates of various commodities, saying that prices have gone sky high.

 

The federal ministers were of the view that the claims of reducing inflation in the country had proved hollow as nothing practical had been done by the finance ministry in this regard. At this, the prime minister also shared the apprehensions of the cabinet members terming the price hike unbearable, particularly for the poor and the middle class.

 

He directed the finance minister to take necessary steps to bring prices, particularly of daily use items, under control so that the poor and middle income segments of society could get relief.

 

Later, Prime Minister Raja Pervaiz Ashraf said that the government was committed to the holding of free, fair and transparent general elections as that would further help strengthen democracy in the country.

 

He said that the government was about to complete its five-year term which would be a great milestone.He said that the international community was appreciative of the measures taken by the present government for the holding of transparent elections.

 

The prime minister said that he would start a series of public meetings across the country. He mentioned his last public address at Gujar Khan and mentioned the unprecedented response which he said spoke of the successful policies of the government.

 

He said that a strong democratic set-up in the country would help bring stability to the country.Prime Minister Ashraf said that he would attend the meeting of the Asia Europe Meeting (ASEM) in Laos next week that would be attended by leaders from Europe and Asia. He termed it a very important event that would have a bearing on Pakistan’s economic and commercial ties with other member states.

 

The prime minister said that he was saddened to hear about the devastation caused by superstorm Sandy in the United States and expressed solidarity of the people and government of Pakistan with the people and government of the US.

 

He said that he had also directed the Pakistan Embassy in Washington to reach out to Pakistanis in the US and set up a hotline to facilitate them.He also apprised the cabinet members about his recent visit to Saudi Arabia to perform Haj, on the invitation of Saudi King Abdullah bin Abdul Aziz.

 

He mentioned his fruitful meetings with the Saudi leaders, including Crown Prince Salman bin Abdul Aziz Al-Saud. He said that he invited the crown prince to visit Pakistan, which he accepted.

 

Later, Minister for Information and Broadcasting Qamar Zaman Kaira, while briefing the media about the cabinet meeting, said that the federal government implemented rigorous financial discipline and achieved a record 21 percent increase in the recovery of taxes during the last four and a half years.

 

He said that the finance secretary informed the cabinet that the overall price situation had stabilised and the inflation in prices had been capped to single digits at 8.8 percent as compared to 25 percent in October 2008.

 

Following the policy of self dependence, the government had collected Rs350 billion as taxes in the current year so far, he said, and added that overall revenue collection had doubled from Rs1 trillion to Rs2 trillion in last four and a half years.

 

The information minister said that the government had raised the salaries of employees by 115 percent during its tenure, while the overall expenditure of the federal government had increased by only 6 percent against inflation of 11 to 12 percent.

 

The country did not default on the payment of loans both internally and externally, he said. He said: “The tax to GDP ratio has increased by 0.5percent. However, the fiscal and monetary steps taken by the federal government unfortunately were not matched by the provincial governments and tax collection decreased in all the provinces.

 

He said that the cabinet was informed that the subsidy on the power sector was affecting the financial prudence of the federal government. While the overall expenditure on the federal government was Rs220 billion per annum, the subsidy on the power sector alone had reached the figure of Rs30 billion per month.

 

Kaira said that the cabinet reviewed the status of implementation of decisions pertaining to the finance division. The cabinet was informed that 93 percent of the decisions made by the cabinet from 2008-2012 had been implemented while the rest were under different stages of implementation.

 

The cabinet was also informed that as a result of the NFC award, the provinces had been given 70 percent of the funds of the divisible pool thus restraining the federal government from meeting subsidies, the minister added.

 

“The country is generating power at a cost of Rs12 per unit but providing the same to the consumers at the rate of Rs9 per unit, the minister said and added if the country imported gas from abroad, it would cost $18 per thousand cubic feet while the same was being provided from the country at a cost of $6 per thousand cubic feet only, he said.

 

Qamar Zaman Kaira informed the media that the prime minister said that on completion of its term, the main agenda of the present government was to arrange free, fair and impartial elections in order to strengthen democracy. In this regard, the steps taken by the present government had been appreciated everywhere in the world. He said that decision of the Supreme Court Asghar Khan case had exposed many political actors. “We are making institutional efforts to ensure that such incidents are not repeated in future,” he maintained.

 

Kaira said that Interior Minister Rehman Malik briefed the cabinet on the health of Malala Yousafzai. He informed the cabinet that she was improving gradually but as per the doctors’ assessment, it would take quite some time for her to fully recover.

 

The cabinet considered and accorded its approval for initiation of negotiations for a Reciprocal Agreement between the Government of Pakistan and Government of the United Arab Emirates and MoU between the Financial Monitoring Unit (FMU) Pakistan and Financial Intelligence Unit United Arab Emirates.

 

The cabinet considered and accorded its approval for signing of MoU between ministries of Defence of Iraq and Pakistan as regards military training of the Iraq Army. The cabinet also approved General Agreement for Cooperation between John Hopkins University (JHU) US and National Defence University (NDU) Pakistan.

 

The cabinet also consented to initiate negotiations on MoU between Pakistan and Egypt in the fields of Social Welfare. The cabinet also approved ratification of MoU on Cooperation between Pakistan National Council of the Arts (PNCA) and Indian Council for Cultural Relations (ICCR). The signing of an agreement between Pakistan and Afro-Asian Rural Development Organisation (AARDO) for the establishment of the sixth regional office of AARDO at the Akhter Hameed Khan National Centre for Rural Development (AHK-NCRD) at Islamabad was also approved.

 

The cabinet also approved the ratification of the visa agreement with India.The cabinet considered and accorded its approval for termination of the Pakistan-Greece Agreement on Avoidance of Double Taxation of Income from the Operation of Ships and Aircraft. The cabinet also gave ex-post facto approval of MoU between Board of Investment (BOI) Pakistan and Concentrix (CX) Solar Korea Co Ltd.

 

The cabinet decided to have a special meeting on overall financial policy of the government which will suggest steps to improve economy and adopt measures to improve the energy situation. The meeting will also discuss support prices of agricultural crops requiring subsidy to improve produce and earn foreign exchange. The prime minister asked the cabinet members to furnish questions and suggestions to the Cabinet Division for discussion and decision during the special cabinet meeting.

 

The cabinet appreciated the measures taken by Secretary, Ministry of Water and Power to reduce loadshedding especially during the Eid, which was a great relief to the people of Pakistan. The cabinet appreciated the overall performance of the Ministry of Water and Power under the leadership of new secretary.

 

Kaira said that general elections will be held no later than 40 days after the interim set-up takes over, meaning elections will be held by May 10, 2013.He said that the interim set up will take over around March 18, 2013, after the incumbent government completes its five-year term. —

 

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Prices have gone sky high, admits PM