ISLAMABAD, Pakistan: The Senate was informed on Wednesday that the Foreign Direct Investment (FDI) into Pakistan witnessed an increase of about 57 percent during July-September 2017-18.
“FDI during July to September in current fiscal year stood at $663 million showing an increase of 57% over the corresponding period of last year. With these positive trends strengthening, the current account deficit will substantially improve in the coming months of Financial Year 2018,” the Minister for Law and Justice Zahid Hamid told the Upper House in the question hour.
The minister said the Country’s total liquid foreign exchange reserves witnessed a reduction of $3.95 billion from the peak level of $24 billion at end October 2016 to $20.05 billion by October 13, 2017.
Zahid Hamid said current account deficit widened to $12.4 billion during FY17 as compared to $4.9 billion in FY16. He said the main contributor to current account deficit was trade deficit which needed to be understood in its true context.
“It is mainly due to increase in imports of machinery, industrial raw material and petroleum products. This sharp increase is due to increased investments under CPEC in energy and infrastructure sectors,” Zahid Hamid said.
The minister said these were healthy imports and would enhance productive capacity of the economy for higher outputs and exports in future.
Moreover, he said there was also stagnancy in remittances due to tight budgetary conditions in GCC Countries as a result of low oil prices, strict regulatory requirements in the United States and depreciation of pound sterling against US dollar.
The negative trend in exports had bottomed out and government initiatives showed positive results as exports had increased by 12.2 percent and workers’ remittances by 1.0 percent during July-September 2017 as against corresponding period of last year, he added.
To another question, he said it was not a fact that sales tax refunds had been issued to fake firms during the last three years by the Federal Bureau of Revenue (FBR).
The minister said biometric system had not been installed in the office of Accountant General of Pakistan Revenue (AGPR) as yet. However, he said an elaborate study for installation of Biometric System was under process, considering the multiple qualities of the system along with accessories which were expected to be completed within a month.
The minister said all the sub-offices of AGPR in Karachi, Lahore, Peshawar, Quetta and Gilgit had also been directed to submit a feasibility study for installation of Biometric System along with requirement of funds.
Responding to a question about National Finance Commission (NFC) award, he said this was a fact that after 7th NFC Award, next award had not been announced. He said the Constitution provided for setting up NFC at intervals not exceeding five years which was being done regularly.
The minister said Terms of Reference (TORs) of the 9th NFC were under consideration and in this regard, recommendations as and when finalized, would be placed before the NFC for consideration.
Zahid Hamid further said the revenue collected by the FBR during the 1st quarter 2017-18 was Rs 765.092 billion provisionally.
The law minister said in order to achieve the revenue target of Rs 4,013 billion for the current fiscal year, FBR was required to achieve a growth of 19.2 percent over the collection during the last fiscal year. He said this growth rate was required to be achieved and maintained in each quarter of the current year to achieve the annual target.
The minister said FBR’s revenues in the 1st quarter had registered a growth of more than 20 percent over the collection made in the 1st quarter of the last year which was above the required growth.
“FBR is well on track to achieving the annual target” he added.
