Nationwide Updates

► Trade policy to aim at improving textile exports

Trade Policy 2008-09 would include ten major initiatives for enhancing textile exports from the country.  Federal Minister for Textile Industry and Commerce, Chaudhry Ahmed Mukhtar in a written reply submitted to the National Assembly informed that in order to enhance the textile exports, many initiatives were under consideration for inclusion in Trade Policy 2008-09.  He said all stakeholders were being consulted for formulation of trade policy, Trade Policy 2008-09 would include 10 major initiatives i.e. opening initiatives for minimisation of contamination in cotton.  (Daily Times)

► Oil import bill may reach $22bn in 2008-09

Country representative Hatton National Bank A B Shahid has cautioned that Pakistan’s oil import bill may reach $22 billion mark in 2008-09 if international crude price touches $150 a barrel. Speaking on impact of budget on banking sector at a “budget breakfast forum,” organised by the Institute of Bankers Pakistan (IBP) here on Saturday, he said that this year, economy suffered because oil import was nearing $11 billion. “What will be the consequences when it touches $22 billion and doubles the trade deficit as a result thereof,” he questioned.  (Dawn)

► The Federal Budget

The PPP-led ruling coalition that came to power after the February 18 elections has had to face multiple challenges, ranging from political to constitutional and social to economic. It is no secret that these problems were inherited by the new government and were not of its own making. Considering this, no one was expecting miracles in the Federal Budget 2008-09, announced on Wednesday by Finance Minister Syed Naveed Qamar. However, this did not hinder the government's economic managers -- who were assigned the difficult task of formulating the budget at a time when the country's fiscal, current account and trade deficits, as well as the inflation rate, were at an all-time high -- from resorting to populist measures.  (The News)

► Another short-lived venture?

Instead of launching new poverty alleviation programmes, the government needs to adopt a holistic approach to development of the poor. Poverty in Pakistan is a growing concern, because nearly one-quarter of the population is officially classified as 'poor'. As a measure of support, the government plans to introduce targeted subsidies of Rs1,000 per month for three million 'qualifying' households, gradually increasing to five million, under the Benazir Income Support Programme in the next fiscal year's budget.under the Benazir Income Support Programme in the next fiscal year's budget  (The News)

► Rationalise the tax regime  

The Economic Survey of Pakistan and the federal budget for fiscal year 09 lament the fact that our tax revenue to GDP ratio is only 9.5 percent, which is far below the average of 18 percent for other developing nations. It has correctly identified the causes of the problem that, in fact, are quite well known. The Survey cites a major problem area when it says the government recognises the need to broaden the tax base and reduce marginal tax rates so as to stimulate investment and production. Broadening the tax base, it notes, will also ensure fair distribution of the tax burden among various sectors of the economy.  (Business Recorder)

► Govt to pass on oil price rise automatically 

The government will automatically pass on any increase in world oil prices to domestic consumers from next month, and phase out subsidies entirely by the end of 2008, a senior official told Reuters on Saturday. The government overshot a budget allocation of Rs15 billion for subsidies by a whopping Rs160 billion in the past year because it failed to pass on any increases when oil prices doubled during the period. The government official said that because of the subsidies consumers were paying the equivalent of $70 for a barrel of crude, almost half the prevailing international market price.  (Dawn)

► Oil on the boil again  

Predictions are that the oil price may touch $150 per barrel over the next few weeks, and its jump to $200 before end of the current (calendar) year is not entirely ruled out. Even the most conservative are now reconciled to the fact of oil above $100 for a long time to come. The distortions in world economy resulting from this 'contrived' surge in oil prices are not yet fully evident, but the shock-waves generated by these tremors have hit every shore. Even the oil producers, enjoying windfalls beyond their wildest dreams, are not immune from these shocks, as the hike in food and commodities' prices, .  (Business Recorder)

► Computer industry in further trouble with 16% GST: PCA 

Federal budget 2008-09 has brought no hope for the computer industry due to the levy of 16 percent General Sales Tax (GST) on computer. Computer industry has already been facing a tough time due to 15 percent GST and now the sector has to face another taxation, said Munawar Iqbal, president Pakistan Computer Association (PCA). He said from last couple of years the computer industry was meeting government officials and pledging them to remove GST to make IT industry flourish. Although they have assured us that the government was very keen to promote IT industry in Pakistan but new budget was very disappointing for us, he added.  (Daily Times)

► Poverty alleviation can be achieved through agro sector

Livestock sector is sharing more than 50 percent of total GDP in agriculture sector so that this important sector should be developed as cottage industry in order to achieve the goal of poverty alleviation at grass root level. This was stated by the Vice Chancellor UAF Professor Dr Iqrar Ahmad Khan while addressing the participants of the closing ceremony of Village Livestock Workers Course jointly organised by Faculty of Animal Husbandry and Livestock Dairy Development Board (LSDDB) here on Saturday. Dr Iqrar Ahmad Khan urged the need for maximum coverage of extension activities including vaccination programme, feed and fodder.  (Business Recorder)

► IMF says will probe oil market

The International Monetary Fund said on Saturday it would investigate the surge in crude oil costs after the G8 club of rich nations called for a probe into wild swings in energy prices. The fund’s chief Dominique Strauss-Kahn said tight demand and supply conditions were the key reason for soaring oil prices, which are up fivefold since 2003, but added that may not be thought to explain all the surge. “One may think some financial considerations are at stake and that’s the reason why the G8 asked the IMF to work for the next meeting in October to produce a report on this question,”   (The News)