- Federal Minister for Energy Hammad Azhar says data shows that in countries where central banks are more autonomous, inflation remains under control and economic growth continues to increase
ISLAMABAD: Federal Minister for Energy Hammad Azhar Tuesday said that concession with respect to appointment of the State Bank of Pakistan (SBP) Board by the federal government was taken from the International Monetary Fund (IMF) after tough negotiations.
While briefing the media along with the Minister for Information and Broadcasting, Fawad Chaudhry, about the decisions of the federal cabinet presided over by Prime Minister Imran Khan, the minister said that the opposition tried to make the SBP law controversial, whereas, fact of the matter is as per proposed law the SBP Board of Directors would be appointed by the federal government, which would have the power to remove the governor SBP.
The SBP governor, deputy governor, and the Board of Directors’ appointments would rest with the federal government and three years’ tenure validity has been existing for the last 50 years and concession with the respect to power of the federal government to appoint board of directors was taken from the IMF after tough negotiations.
He termed the criticism of the opposition against the SBP (Amendment Bill) as “unjustified” and stated that the government has not compromised on the country’s interests.
He said that the fact of the matter is that central banks in developing countries are more than what the SBP would be after the law designed to grant him approval. The minister said that the data shows that in countries where central banks are more autonomous, inflation remains under control and economic growth continues to increase.
Azhar said that the previous government built foreign exchange reserves through borrowing and subsequently, used them to support the artificial exchange rate.
Without naming the Pakistan Muslim League-Nawaz (PML-N), he said that billions of dollars were used to support the artificial exchange rate and then in the last year to show growth, it resorted to printing of currency, which in turn led to inflation, he added that one deputy governor of the SBP was indicted in money laundering by former finance minister.
He said that the PML-N had also approved the SBP law and delegated all the powers of the federal government to the board of directors of the SBP.
The federal government powers to give instruction to the SBP were surrendered to the board of the central bank, whereas, the present government acquired the power of the appointment of the SBP board of directors, he added.
The minister said that serious economists have been seeking the autonomy of the SBP subject to checks and balances.
He said that the SBP and its all assets would remain in the ownership of the federal government.
He said unfortunately, politics was being played by the opposition.
The minister said that the opposition is doing politics on the SBP autonomy as it has been doing on the inflation to create an impression that inflation in the country has been because of some kind of government action, whereas, reality is that Pakistan is part of the world and its 25 percent GDP is based on trade. Of oil prices increases, it would of course have an impact on Pakistan, he said, adding that the power plants set up by the Pakistan Muslim League are not making 70 percent electricity on imported fuel and fuel cost adjustment is burdening consumers due to power plants set up by them.
On gas shortage in Karachi, the Minister for Energy said that in winter, the government diverts industrial gas to domestic consumers as per priority order but this time general industries got a stay order from the Sindh High Court (SHC). The minister said that when 100 mmcfd of gas is diverted to the domestic sector, the issue would be resolved significantly in Karachi.
The minister said that the SSGCL would present their case in the court today and hopefully the court would give a decision in favour of the SSGCL.
The cabinet was informed about a significant increase of 5,000 per day in omicron cases and consequently, numbers of patients in the ICU has also been on the rise.
The cabinet was of the view that vaccination was the only protection against the omicron and those who have got booster shots are less vulnerable to the virus.
The spread of the virus is high in school going children, the meeting was told.
The minister said that Karachi was lagging behind in vaccination.
The next discussion was also held in the federal cabinet on Special Technology Zones (STZs).
The minister said that the government would also get the SBP law passed from the Senate.
The federal cabinet also asked the National Assembly and the Senate not to include the conflict of interest people in the standing committees.
The cabinet was briefed about the urea fertiliser situation in the country and urea production was the highest in the history of the country but two things must be kept in mind that wheat cultivation area increased by 500,000 acres and urea prices were also high in the international market.
The meeting was informed about power transmission and steps being taken to reduce the line losses.
The meeting was informed that this would be the first year when the circular debt would decline.
The meeting was informed that green cover is increasing in the federal capital and the prime minister directed that master plans of all the big cities should be completed on priority basis.
The meeting of the federal cabinet has allowed amendment in Rules of Business 1973 and the First Women Bank has been exempted from audit for a period of six months.
The cabinet was presented the annual report of the Nepra, which noted that the installed capacity of electricity is 39,000 MW and circular debt at Rs2,280 billion.
Copyright Business Recorder, 2022