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Jafarey Reviews economic situation

Fighter measures

have helpes in

checking inflation

ISLAMABAD: Formal pre-budget meeting of the Advisory Council for Finance Division was held here on Tuesday under the Chairmanchip of V.A. Jafarey, Adviser to PM for Finance and Economic Affairs .

The meeting was attended by Minister of State for Finance Makhdoom Shahabuddin, Deputy Chairman of Planning Commission, Chairman CBR and the concerned senior officials of the government. V.A. Jafarey gave a comprehensive review of the current economic situation. He said that the economy was undergoing a restructuring process aimed at achieving macro-economic stability, reducing budgetary deficit, checking excessive liquidity and strengthening the external stability.

He said the government had made considerable progress in that direction but the economy was still passing through a transitory stage structural process.

The Adviser said that the GDP growth for the year 1995-96 was estimated to be over 6 percent and the agricultural sector had shown substantial improvement. cotton production, he said, was estimated to be over 10 million bales while wheat crop has done fairly well and its production would be on target.

Jafarey said that the exports in dollar terms increased by 3 percent in January and by 20 percent in Feburary as a result of remedial measures taken by the government.

The growth in imports has also decelerated, the foreign exchange reserves has increased to more adequate levels. Foreign investment flows continued to increase. In the first eight months of 1995-96, total private investment was $ 644 million as against $ 507 million in the previous year.

However, he said, there was a change in composition of foreign investment and the direct investment increased from $ 277 million to $ 589 million.

He in said that tighter control, in combination with improved domestic supplies and timely import interventions has enabled the government to somewhat contain the inflationary pressure.

The Sensitive Price Index, he said, which consists of 46 essential consumer items, recorded an increase of 6.91 percent during July-March, 1995-96 compared to 11.63 percent in the corresponding period last year.

Likewise, he said, the CPI and wholesale price index has recorded a slower increase than last year. The target for the end of the year is an increase of 9.5 percent measured in terms of CPI, he added. Jafarey said that Privatisation had continued to make good progress. Over 80 industrial units had been privatised. In the financial sector, he said, sale of UBL has been negotiated and BEL will shortly be disposed of to private investors.

An important landmark, he said, was the sale of Kot Addu power complex, the first privatisation in the power sector.

The participants of the meeting underlined the need for bringing about the buoyancy and elasticity in the tax-net and the importance to raise revenues and reduce expenditure so as to reduce budget deficit and dependence on internal and external borrowing.

The participants appreciated government move for providing an opportunity to the business community for presenting their views in the finalisation of budget proposals.-APP