Government working to make stock market capitalisation 100 percent of GDP: Salman

The Advisor to Prime Minister on Finance, Shah, has said that the capitalisation in Pakistan's stock market has reached the level of $70 billion, which is about 50 percent of the country's $145 billion GDP. "We are working to help it to get equal to the country's GDP size," he said while talking to a group of economic journalists here on Saturday.
He said that big companies should get themselves listed on the stock exchanges to raise equity instead of depending on banks for loans. He said that Pakistan has the potential to emerge as the hub of manufacturing and information technology in the region, like China and India.
He said that the federal government had made 22 percent increase in the allocation for education sector for next year, and added that the provinces were also making similar raise in the funds for this vital sector for human resource development.
Dr Salman said that competitiveness of industrial and other sectors of national economy could be enhanced by increasing productivity. Similarly, he said, to make products internationally competitive there was no need to increase the interest rate or exchange rate adjustment. Enhanced productivity could help achieve this objective significantly, he added.
While quoting reports of international consultancy firms, Verner and Gerzi, he said that improvement in the productivity of textile sector was a double task. About provision of daily use items to the poorest of the poor segment of the society at subsidised rates, he said that Quality Assurance Cell and Monitoring Cell had been set up to ensure availability of quality products to the consumers at subsidised rates.
He said that the size of the country's Gross Domestic Product (GDP) had risen to the level of $145 billion, from $70 billion in 1998-99. " Had we constructed more dams, after Tarbela, our economy could have grown 10 times," he added.
He said that bumper crops of wheat, cotton and sugarcane had resulted in the injection of Rs 250 billion, Rs 180 billion and Rs 85 billion, respectively, in the rural economy of the country. "Good harvest has increased the purchasing power of the rural community significantly," he added.
He said that good return for agricultural produce had also contributed to the hike in prices of food items. Quoting a report of the latest issue of Newsweek magazine, Dr Salman said that the average world inflation of food items at present stood at 23 percent.
He said that the use of maize, sugarcane and palm oil for bio-diesel production had also resulted in the price hike of these commodities. He expressed hope that the prices of palm oil, which recently touched the level of $815 per ton, would start declining.
About increasing opportunities of foreign investment in Pakistan, he said that a recent report of Merril Lynch had urged the investors to 'Dump India and buy Pakistan'.
He hoped that establishment of 10 foreign universities of Science, Technology and Engineering in the country would help produce the manpower which would ultimately attract outsourcing, especially BPO companies to Pakistan. he said that steps being taken by the government would help bridge the gap between power generation and consumption in the country.
"We are expecting additional 800-900 megawatts power within a month due to authorisation of captive power plants (CPPs) to sell electricity, installation of two rental power plants and increased inflows in the rivers due to glacial meltdown," he said.
Salman said that the National Electric Power Regulatory Authority (Nepra) had allowed the CPPs to sell power to consumers, and added that total installed capacity of CPPs, mostly owned by textile mills, stood at 400 megawatts.
He urged the consumers to adopt power conservation techniques like the use of energy savers, as 5 percent to 10 percent cut in the use could help save 400-500 mw electricity.
He said that the annual growth of power consumption, which was 3 percent in 2003-04, had shot up to beyond the levels projected by the planners. Most of the contribution to power consumption rise was mainly from domestic sector due to increase in the use of consumer durables like air-conditioners, TVs and washing machines, he added.