Last update: Thu, 19 Jan 2017 01pm



EDITORIAL: It is not only the aggregate amount of credit but also its distribution which is very important because it shows the level of priority accorded to various sectors of the economy. According ...
EDITORIAL: The Paris conference on peace in the Middle East warned Israel and the Palestinians on January 15 against "unilateral steps" on Jerusalem and borders that could threaten a negotiated soluti...
Pakistan ranked 52 in the Inclusive Development Index (IDI) 2017 while India ranked at 60 among 79 developing countries - a ranking that makes Pakistan proud given the recent display of India's considerable economic might in the international community reflected by its capacity to purchase from a recession-ridden West. Inclusive growth, by definition, is a much more desired goal reflective of all socio-economic groups particularly the disadvantaged.
After a long dry spell Karachi received its first winter showers last week. Which should have been a very welcome blessing, but it turned out to be a bane to the city dwellers. Life in the metropolis seemed to have come to a standstill as rainwater inundated a number of major thoroughfares causing hours-long traffic jams, disappearance of public transport from the roads leaving commuters stranded on bus stops, while those living in low-lying areas couldn't venture out to pursue any activity. On top of that, some 100 feeders of the Karachi Electric (KE) gave in cutting power supply to many areas. All this, to say the least, is unbecoming of the country's largest city and its commercial capital.
Federal Finance Minister Ishaq Dar announced a raise in petrol prices on 15th January, instead of the usual last day of the month, fuelling the perception that the objective was to at least sustain the budgeted revenue from this particular source; those less supportive of Dar's policy decisions are maintaining that the decision was necessary to ensure some funding for the recently announced Rs 180 billion export package which was not a component of federal expenditure in the current year. To determine which view is the more credible it is necessary to determine how the price of petrol and products is set in this country.
A row between the Centre and the provinces over the former's proposal that the latter part with their share of the divisible pool to the extent of two percent for FATA and one percent each for Gilgit-Baltistan and Azad Jammu and Kashmir to finance their respective development. In the case of FATA, this would amount to Rs 60 billion, over and above its federal government financed Annual Development Programme, which in 2016-17 amounted to Rs 18.2 billion. The provinces argue that FATA, Gilgit-Baltistan and Azad Jammu and Kashmir are under the control of the federal government and it should be funding these areas' development, not the provinces. This impending row should be viewed in the context of the Sartaj Aziz-headed FATA reforms committee's 80-page report, which its chief wants early approval for from the federal cabinet. However, senior figures in Islamabad reportedly argue that the report, even if approved by the cabinet, may remain a dead letter like similar reports in the past unless a financial package has been worked out for its implementation, with clear guidelines on who will foot the bill. Sartaj Aziz is impatient with such quibbles, insisting early approval of the report is essential, with the financial package details being worked out thereafter. Reportedly, the report seeks a merger of FATA with the province of Khyber Pakhtunkhwa. Now, as far as the proposal to exact funds from the provinces' share of the divisible pool is concerned, the latter are already up in arms against a three percent deduction from their share on account of security for the China Pakistan Economic Corridor and another one percent each for climate change and sustainable development goals. Added to the proposed FATA levy, that would bring the total deduction from the provinces' share to nine percent. As an example of the provinces' thinking on the issue, Khyber Pakhtunkhwa Chief Minister Pervez Khattak has protested the deduction at source by the federal government of funds for the census and the withdrawal of the subsidy on fertilizer. This is just a glimmer of the deep distrust between the provinces and the Centre, particularly Khyber Pakhtunkhwa and Sindh, both having non-PML-N governments. Analysts think that the federal government, unable to meet its own financial needs, is trying to encroach on the provinces' domain, in the process undoing the spirit and thrust of the 18th Amendment and taking away the hard-won enhanced share of the provinces in the last National Finance Commission Award. Based on the track record and the recent practices of the Centre, the provinces harbor the suspicion that if they make any further concessions, the federal government is likely to seek more deductions.
It must be a pleasant surprise for the National Savings Schemes (NSS) investors that the State Bank has taken the right initiative and done a great justice to reduce the inconvenience faced by them at the counters of national saving centres almost every month. According to a circular issued by the SBP on 11th January, 2017, it has now allowed clearing house membership to the Central Directorate of National Savings (CDNS), which will enable widows and senior citizens to deposit National Savings issued instruments directly into their bank accounts anywhere in Pakistan. All banks have been instructed to accept profit coupons and withdrawal slips of CDNS-run Pensioners Benefit Accounts, Behbood Saving Certificates and Saving Accounts and these banking instruments will be cleared through National Institutional Facilitation Technologies (NIFT). NIFT is a joint venture between a consortium of six major banks and the private sector. All commercial banks in Pakistan are members of its clearing system.