These included Gulf 81MW, Reshma Power Rental Project 220MW, "Ruba Energy Rental 170MW, Sialkot Rental Power Project 85MW, Sahuwal 150MW and 248.95MW Karkey rental project. Briefing media after the Cabinet meeting, Minister for Water and Power Raja Pervez Ashraf along with the Minister for Finance and Minister for Information said following approval of 11 points Asian Development Bank (ADB) report, eight RPPs of 1156MW at advanced stages of implementation should be vigorously pursued while on those six of 838MW which have been identified as signed but not yet effective, the government should carry out legal review of its options before taking any further action, he added.
The ADB recommended that five RPPs, which have not yet been approved, should be discontinued. Replying to a question as to how much impact the installation of eight rental power plants would have on tariff, he said the impact on tariff by installation of 8 projects of 1156MW would be 6.1 percent while of all the 14 would be 9.9 percent. The minister said the Cabinet also approved installation of a new power plant at the site of obsolete plant at Guddu to generate 747MW of power instead of existing 200MW.
The Minister for Finance giving details of his briefing to the Cabinet on the economic situation said there are visible signs of recovery in the economy but greater political resolve is required to improve the governance and institutional strengthening to plug the wastage amounting to Rs 1.4 trillion, 8 to 10 percent of the GDP.
He said growth projection for the on-going fiscal year has been increased to 3.4 percent from 3.3 percent largely because of visible signs of economic activity. The manufacturing is projected to grow by 5.8 percent against 1.8 percent of previous year, agriculture 2.5 percent and services 3 percent. The budget deficit would be in the range of Rs 722 billion or 4.4 percent of GDP.
The Finance Minister said the government has to give Rs 310 billion for post budget challenges not allocated in the budget. These included Rs 170 billion for defence on account of law and order and war on terror, Rs 85 billion for subsidy including Rs 55 billion to the consumer and rest to the KESC, Rs 20 billion for textile sector. The total shortfall, he said would be around Rs 310 billion which would be met through revenue collection and also through inflows expected from the Friends of Democratic Pakistan (FoDP).
The minister said fiscal deficit might be 5.3 percent owing to post budget challenges of internal security, political uncertainty and the issue of NRO, which escalated political temperature in the country. He said exports in six months were $9.2 billion showing a drop of three percent while imports stood at $16 billion, showing a reduction of 16 percent and as a result, trade deficit came down to 29 percent.
At the same time, he said remittances from overseas Pakistanis increased by 24.5 percent and the current account deficit has shown improvement. He said about Rs 1.5 trillion were being lost because of governance issues, which is 8 to 10 percent of GDP.
Minister for Information Qamar Zaman Kaira said the Cabinet meeting decided to increase across the board pay of army officers by 15 percent and of Jawans by 20 percent irrespective of their deployment in any part of the country, which would cost Rs 35 billion. He said a committee comprising Finance and Interior Ministers was constituted to consult the Balochistan government to bring the pay of police personnel in the province at par with other provinces.
The meeting decided that $899 million provided by the US for budgetary support for 2009-10 would be used for Benazir Income Support Programme (BISP), HEC, population welfare and health in the earthquake affected areas. The meeting also decided to import 0.5 million tons sugar to overcome the expected shortage of 1.2 million tons. The minister said the Trading Corporation Pakistan (TCP) has been asked to import 0.5 million tons sugar before April 2001 while the remaining would be imported before June 2010.
About wheat, he said the country would have additional stock of 3 million tons and the meeting in view of weather conditions decided to have this as strategic reserve. He said the wheat procurement target for the next fiscal year was fixed at 7.5 million tons and it was also decided that procurement would be done through open bidding. Kaira said Philippines has also offered sugar on cheap price to Pakistan and expressed the desire to import rice. The meeting also decided to double the supply of sugar at the Utility Stores but only at Rs 10 per kg lower than the market rate.