ISLAMABAD: The finance and the commerce ministries of Pakistan are at loggerhead over utilisation of funds for strategic interventions, viz-a-viz promotion of domestic commerce and accelerating exports, it was learnt yesterday.
While the commerce ministry sought an amount of Rs26.14bn for promotion of trade initiatives, the finance ministry suggested an amount of Rs10bn for the next three years on trade promotion initiatives, to be announced as part of the strategic trade policy framework (STPF) 2012-15.
The commerce ministry had originally demanded Rs60bn, but the amount was reduced to Rs26.14bn on the intervention of the finance minister and the deputy chairman of Planning Commission. For the first year, the commerce ministry sought funding of Rs5bn, but the finance ministry wanted it to be restricted to Rs2bn for the year 2012-13.
The commerce ministry identified 26 sectors for cash interventions during the years 2012-13, 2013-14, and 2014-15 which have now been reduced to 14 owing to resource constraints.
The announcement of the policy has already been delayed because of differences on allocation of funds since August 2012.
An official source said that a final decision on finance-related issues would be taken up in the cabinet meeting.
Prime Minister Raja Pervez Ashraf has already approved trade policy for submission to the cabinet for a formal approval.
The commerce ministry in its proposals suggested to mark-up rate support of two percent be provided on prevailing LTFF for future import/purchase of machinery. An amount of Rs500m was proposed for this scheme to be implemented in the year 2012-13.
The total amount to be spent under this account in three years was projected at Rs3bn. For the creation of Exim Bank, an amount of Rs5bn was proposed.
It was proposed that mark-up rate support of 1.5 percent be provided on export finance scheme (EFS) to selected sector exporters at a cost of Rs1.250bn in the next three years.
For the year 2012-13, an amount of Rs200m was proposed. The sectors for EFS support are: fish and fish preparations, fruits, vegetables, spices, meat and meat preparations, carpets and rugs, sports goods, footwear, leather products, surgical goods, cutlery, onyx products, pharmaceuticals, electric fans, transport equipment, electrical machinery, etc.
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