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Federal budget 2000-2001 in May

Rules being amended to facilitate IT firms listing on bourses; takeover law ready and waiting cabinet's nod; 5-10 pc shares of state assets to be floated before being offered to strategic buyers

KARACHI: Finance Minister Shaukat Aziz has said that federal budget 2000-2001 will be announced by end-May 2000 as the government expected to complete its budget preparation by then.

Talking to newsmen after addressing a seminar on "Savings and Investment: Avenues and Aversion" here on Monday, he said the budget will be presented in a "normal process" applicable from July 1, 2000.

He avoided the question of any increase in defence expenditure in the budget, saying, "you should wait for the budget."

He said International Monetary Fund (IMF) Mission was expected soon to start discussion with the government about the Poverty Reduction and Growth Programme (PRGP). However, no date has thus far been fixed for Mission's arrival as Pakistan has not yet invited it.

He said the government has not finalised any amount to be requested from IMF for short-term period under Extended Fund Facility (EFF) and for PRGP and the issue will be discussed during talks with the mission.

PRGP entailed a long process and Pakistan will ask for short-term facility under EFF which will be needed before June 2000 to maintain balance of payment position.

On tariff row with Hub Power Company (Hubco), he said the company has submitted a fresh proposal for tariff reduction and the government was currently studying it. The dialogue will resume by the end of this month.

On General Sales Tax (GST) he said everyone should pay due share in taxes otherwise economic sovereignty will not be achieved. He did not disclose details of the GST rates to be imposed at all stages from the next budget and said these will be announced in the budget.

He welcomed the change in attitude of the textile sector which was reflected by increase in import of capital equipment. "It is a good news that the textile sector has started upgrading their industry," he said. "Import of capital equipment is picking up and upgradation of textile machinery will pay back to the investors in the form of premium price of their products."

Talking about the prospects of the economy, he said the growth projections for the year are around 4 to 4.5 percent whereas the exports of textile products are on the rise.

He said relevant rules were being amended to list Information Technology (IT) companies on the stock exchange to boost IT sector. The present criteria was not allowing new small-scale IT companies to get listed on bourses. Measures were being taken by the Securities and Exchange Commission of Pakistan (SECP) to change such rules to accommodate these companies in order to develop IT in the country.

He said draft law on takeover was ready and will be enforced once it wins cabinet nod. The law was aimed at providing protection to small shareholders who complain that of 763 companies listed on KSE, 300 were not paying dividend to them.

The minister said there were only five new issues during the last three years with no new company getting listed in 1999. "We have not yet been able to reverse this trend."

He said government has a plan to float at least five to ten percent shares of state-assets on the stock exchanges before offering them to strategic investors. He said that five percent shares of National Bank of Pakistan (NBP) would soon be offered to public. He hinted that United Bank of Pakistan (UBL) shares could also follow the same path. APP/PPI