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• India asked to restore the status quo ante in relation to J&K and Article 370 of Constitution

• Reuters claims the summary approved by ECC was earlier greenlighted by the PM

ISLAMABAD: The federal cabinet has turned down the decision of the Economic Coordination Committee (ECC) of the Cabinet to open import of sugar and cotton from India, and noted that no trade and economic activity can be possible as long as it does not review the 5th August 2019 decision through which New Delhi revoked the special status of Occupied Jammu & Kashmir.

Minister for Science and Technology Fawad Chaudhary, after a cabinet meeting, told media that the federal cabinet did not endorse the ECC’s decision to import sugar and cotton and noted that for normalisation of trade and friendship, India needed to resolve the Kashmir issue and go back to 5th August position.

On Wednesday, soon after presiding over the first meeting of the ECC, Minister for Finance Hammad Azhar told media that the decision has been taken to import of sugar and cotton from India to provide relief to the poor as there is a price differential of about 15-20 percent.

A day after, on Thursday, a federal cabinet meeting presided over by Prime Minister Imran Khan noted that as long as the illegal occupation of Jammu and Kashmir by India continues and efforts to change the position were not reverted back to the 5th August 2019 position, such decision (to open trade) would have to be processed through scrutiny determined in this regard by the government of Pakistan.

“So, to state that the ECC’s decision is government’s decision is not correct,” he said and added that “so far, the government has not given approval to any kind of trade with India”.

The minister said that economic growth cannot be at the cost of the Kashmir issue as there is a stated position of the prime minister that peace in South Asia and economic development lies in the settlement of the Kashmir issue, and it is equally important that India goes back to the position of 5th August 2019. “This is impossible that Muslims in India are considered second class citizens, being murdered, and rights to the people of Illegally Indian Occupied Jammu and Kashmir are denied, and India and Pakistan cannot live happily [in such a situation],” he said.

The cabinet reiterated the government’s position that the first condition for normalisation of relations would be that India should go back to the 5th August position.

Another important agenda taken up by the federal cabinet was that as the Covid situation is getting worse, the federal cabinet has taken an important decision and fixed the price of Chinese vaccine at Rs4,225, while the price of the Russian vaccine would be fixed in the light of the Sindh High Court’s decision.

The minister added the cabinet also decided that the people of Gilgit-Baltistan and the federal capital would have Sehat Sahulat facility.

The meeting also fixed the price of 43 medicines. Price of medicine was increased by it.

Fawad Chaudhary added that to improve the progress of bureaucracy and its delivery, removing inefficient bureaucrats has been made easier.

The prime minister directed the cabinet (ministers) to look into their departments to remove “inefficient” officials.

The federal cabinet also decided to release the Broadsheet Inquiry Commission report and decided to initiate criminal proceedings against five persons – Ahmer Bilal Sufi, Hassan Saqib Shaikh, who is presently serving in the Federal Board of Revenue (FBR), Gulam Rasool, who was joint secretary Ministry of Law, Abdul Basit, former Deputy High Commissioner in UK, Shahid Ali Baig, the director Audit and Accounts HC London, and Tariq Fawad Malik, who is accused of arranging the Broadsheet contract.

He said that the Broadsheet Commission has declared these five persons as the main accused in its report.

Additionally, the minister stated that the Broadsheet also highlighted an important point and declared 2011-2017 period of the NAB accountability process as the “darkest era” of the NAB.

He said that due to negligence of the NAB administration, documents related to the Swiss accounts disappeared and the commission recommended that criminal liability should be determined against Qamar Zaman, the then chairman NAB and other officials.

He said as the original record of Swiss cases is available with the NAB, now the government can open Swiss account against former president Asif Ali Zardari and the legal team in this regard is examining the prospects.

The Minister for Science and Technology said criminal proceedings against the DG NAB and the prosecutor general are being initiated.

He said that on petroleum crisis inquiry report, the cabinet was informed about three main actions – administrative, criminal, and legislative.

“Action would be taken against those companies that failed to maintain 20 days stock and those companies who had not supplied oil timely and those who have manipulated berthing process. The Ogra law would be amended to create a balance between the Petroleum Ministry and the Ogra. On administrative side, the people of Directorate General Oil involved in the crisis would be removed, and similarly, people involved at Port Qasim would also be removed. A Monitoring Cell would be created in the Petroleum Division for data collection,” he said.

The minister said the federal cabinet was also presented an audit report on State-Owned Entities (SOEs) and the meeting directed that report be presented before special committee on SOEs.

The meeting also approved tax exemption on loans borrowed after February 2020 and constituted a subsidiary of the Pakistan Steel Mills of Pakistan to expedite the PSM privatisation process.

Reuters adds: The federal cabinet on Thursday put off allowing imports of cotton and sugar from neighbouring India until Delhi reviews its 2019 move to revoke the Kashmir region's special status, foreign minister Shah Mahmood Qureshi said.

In an effort to cool local demand and prices, Pakistan's Economic Coordination Committee (ECC), the country's top economic decision-making body, gave the go-ahead on Wednesday for the imports, which would have ended nearly two years of trade suspension between the nuclear-armed rivals.

"It was a consensus opinion, including the prime minister, that as long as India doesn't review the Aug. 5, 2019, unilateral steps it took, it wouldn't be possible to normalise relations with India," Foreign Minister Shah Mehmood Qureshi said of the cabinet meeting, chaired by Prime Minister Imran Khan, which had to endorse the ECC's decision for trade to start.

He said the cabinet decided to defer the decision.

It wasn't immediately clear why Pakistan would defer a decision within a day. The ECC approval came only after Khan had seen and authorised the proposal to import sugar from India, according to a commerce ministry summary seen by Reuters.

India's foreign office didn't respond to a request for comments.

The developments have come amid a gradual thawing between the two neighbours after their militaries released a rare joint statement last month, announcing a ceasefire along the Kashmir border.

Pakistan was one of the leading buyers of Indian cotton until 2019, when Islamabad banned imports of goods from India after New Delhi revoked the special status of occupied Kashmir region.

Pakistani buyers have already been making inquiries about buying Indian sugar and cotton, which is being offered at lower prices than supplies from other countries, Indian dealers said.

The traders say they have been offering Indian white sugar at $410 to $420 a tonne on a free-on-board (FOB) basis, far lower than the domestic price of $694 quoted in Pakistan.

According to a commerce ministry document seen by Reuters, Pakistan's cotton industry has been grappling with a shortage, requiring the import of 5 million to 6 million bales of cotton to meet the shortage this financial year.

AFP adds: But on Thursday Interior Minister Sheikh Rashid Ahmed told reporters the decision had been "deferred" until New Delhi restored Indian Illegally Occupied Jammu and Kashmir's special status.

Islamabad suspended trade and diplomatic ties with India in 2019. Both countries withdrew their top diplomats, and consular staff were expelled or withdrawn.

Pakistan's economy is in the doldrums, a position made worse by a third wave of the coronavirus pandemic that has seen the reintroduction of partial lockdowns across the country.

The import of half a million tons of sugar would likely have slashed prices by up to 20 percent ahead of the forthcoming holy month of Ramazan, when consumption soars.

The economic committee had also paved the way for three million tons of wheat to be brought in, as well as unspecified quantities of cotton and yarn.

Bloomberg reported last week that the United Arab Emirates had brokered secret back-channel talks between the two South Asian nations.

Copyright Business Recorder, 2021

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