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Express Tribune
a day ago
- Business
- Express Tribune
Are stabilisation measures backfiring?
Under the emerging situation, the people are facing unemployment and underemployment and this scenario is grave from the socio-political point of view. photo: file Listen to article The stabilisation measures have impacted the real economy a great deal. The market economy has been growing slowly, as indicated by the statistics of GDP. The current account surplus from July to May 2025 remained around $1.8 billion. This surplus has been achieved at the expense of imports, where deliberate attempts have been made to scale down imports in the last couple of years. In addition, remittances of around $38 billion also helped in achieving the surplus. The massive import compression, started in FY2023 to stabilise the economy, has produced results. This compression played an important role in bolstering the foreign exchange reserves held by the State Bank of Pakistan (SBP), which have crossed $14 billion. If the economy operates at the current level, foreign exchange reserves will cover around 2.5 months of merchandise imports, since imports remained around $58 billion in FY2025. Apart from rollover of commercial loans from China, the SBP intervened in the foreign exchange market to fulfil the target of foreign exchange reserves agreed with the International Monetary Fund (IMF). On the monetary front, the SBP has kept the policy rate at 11% to attract international financial capital. This high rate will attract hot money to finance the current account in the event it turns into deficit. The growth in imports is linked with the growth in the real economy, which will turn the current account surplus into a deficit. As the level of aggregate demand is low, business firms cannot sell their products to consumers. Furthermore, the level of aggregate demand remained low owing to regressive taxation and high energy costs. The gas prices have been revised upward in FY2026, while electricity prices are already at an elevated level. The higher international crude oil prices have started to affect the masses. The salaried class has paid around Rs550 billion in income tax in FY2025, and the tally would remain around this level in the current financial year. All these measures have reduced the purchasing power of consumers. Many firms have invested in treasury bills, bonds, and Sukuk, since these firms intend to remain liquid. A whopping Rs13.5 trillion has been parked by the corporate sector in bills, bonds, and Sukuk till December 2024. Business firms did not enhance investment in the capital development of the country. As a result, the index of the Large-Scale Manufacturing sector has decelerated by 1.2% in the eleven months of FY2025. The government did spend around Rs1,050 billion through the Public Sector Development Programme (PSDP) in FY2025. The tight-fisted Ministry of Finance (MoF) allowed the release of a large chunk of the budgeted funds in the last quarter. The development funds have been diverted from development projects to meet the primary budget surplus. The tight fiscal and monetary policies have also reduced the level of economic activity a great deal. The high debt servicing cost has further reduced the fiscal space of the government. Under the Extended Fund Facility (EFF), the government intends to bring down the fiscal deficit to around 6%. This reduction in the fiscal deficit can be achieved by scaling down development expenditure. The impact of low development expenditure has already affected the cement, steel, glass, and allied manufacturing sub-sectors. In addition, the construction sector remained dull in the outgoing financial year. In a nutshell, stabilisation measures have started to implicate the masses a great deal. Under the emerging situation, the people are facing unemployment and underemployment. The level of unemployment is high for university graduates. This situation is grave from the socio-political point of view. Will policymakers take stock of the situation? THE WRITER IS AN INDEPENDENT ECONOMIST
Time of India
6 days ago
- Time of India
Four of a family booked for cheating Dighi resident of Rs13.5L
Pune: The Dighi police have registered a case against a family of four for cheating a local resident of Rs13.5 lakh. The family had reportedly promised to secure a govt mining job for the complainant's son in Dec 2021. Tired of too many ads? go ad free now However, when the promised job did not materialize, the complainant wanted his money back. Upon the refusal to return the money and alleged death threats, the victim approached the police. A case has been filed against the four individuals under sections 316 (criminal breach of trust) and 318 (cheating) of the Bharatiya Nyaya Sanhita (BNS). According to an officer from the Dighi police station, the accused family repeatedly took money from the complainant under various pretexts. "Between Dec 2021 and June this year, the complainant gave Rs13.5 lakh to the suspects. The suspects in return issued a fake appointment letter for his son. They even threatened him with dire consequences when the latter asked for his money. We have registered a case and are searching for them," the officer said.
Time of India
20-06-2025
- Business
- Time of India
Solar Projects A Ray Of Hope To Curb Electricity Budgets
Pune: When Park Royale, a housing society with 433 flats in Wakad, first installed a solar project seven years ago, the pilot phase yielded promising results. Encouraged, they scaled up the total capacity to 172.5-kW and today, their annual electricity expenses for common amenities in the complex have dropped from Rs62 lakh to just Rs13.5 lakh — almost a fifth of costs — thanks to the switch to solar. Tired of too many ads? go ad free now This reduced expenditure even includes the Rs7 lakh used for operating their society's sewage treatment plant (STP), which now runs on a green meter (providing subsidized govt charges for power). Society chairman Manoj Shinkar told TOI, "Initially, we had installed a 30-kW solar plant in 2018, and the investment was recovered in just two years as we also received govt subsidy on it. Encouraged by the savings, we expanded the project gradually in four different phases and reached 172.5-kW by 2023." Park Royale is one of the housing societies in Pune and Pimpri Chinchwad that are choosing to significantly cut down on electricity costs by switching to solar power. By installing rooftop solar systems, many societies have managed to power all their common area facilities—lifts, water pumps, and lighting—entirely through solar energy. Members of such societies say the move has led to substantial savings, amounting to lakhs of rupees annually, allowing them to reduce monthly maintenance charges for residents. Shinkar echoed that the benefits get passed on to flat owners. "Earlier, we charged Rs3 per sqft as maintenance. This has reduced to Rs2.5 per sqft—one of the lowest maintenance charges by any housing society in Wakad and nearby areas," he said. The entire solar setup cost the society Rs95 lakh by 2023, and the agency will handle maintenance for the next five years after each installation at no extra cost as per the agreement. Tired of too many ads? go ad free now With money saved on power bills, the society has also invested in other infrastructure upgrades, including a Rs15 lakh waste composting plant. Additionally, all common areas are now equipped with energy-efficient LED lighting to further reduce power consumption. Another such example is the La Melosa Housing Society — also in Wakad — which has 234 flats. The society installed a 76-kW solar system in March this year. Society chairman Jasbir Singh said, "Over the last two months, our common electricity bill dropped from an average of Rs2-Rs2.4 lakh per month to just Rs3,500 per month. The difference is staggering." Singh said the installation agency estimated annual savings of Rs18 lakh, considering that power generation from solar systems usually reduces during the monsoon season and one may need to pay more towards electricity bills during that period."We spent Rs35 lakh on the project after receiving govt subsidy and expect to recover this cost in two years," he added. The society financed the project internally and plans to reduce the monthly maintenance fee once the investment is recovered. "For any housing society, electricity and water are the major expenses covered under maintenance. If we manage these efficiently, the overall cost for residents can be brought down significantly. That's why every society should consider installing solar systems," Singh said. Besides large complexes, many smaller residential establishments are also adopting solar energy, such as the Bhagyashree Apartments in Pune's Kothrud. The 10-flat residential building was recently recognized and felicitated by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) as the first fully solar-powered residential apartment in the entire district. The society had initially installed an 11-kW solar system two years ago to power common amenities. Encouraged by the savings and efficiency, residents decided to extend solar power usage to all individual flats. Accordingly, in Jan this year, they added another 19-kW system, including -1-kW system for four flats, 2-kW for three flats and 3-kW for the remaining three flats, making the entire building solar powered. Mandar Deshmukh, a resident here, said, "Earlier, the monthly electricity bill for my individual flat was around Rs2,000. Since switching to solar, it has dropped to zero." The building now has a total of 30-kW rooftop solar capacity, which meets the entire electricity demand of all 10 flats and common areas, making it a model for sustainable residential living. Solar agencies confirmed that they are getting increased inquiries from housing societies — but added that many hesitate to install it due to shortage of funds. On average, it costs around Rs25 lakh to install a 50-kW solar project. "However, housing societies can also opt for OPEX (operating expense model), under which the third-party vendor owns, installs, operates and maintains the solar system, and the housing society only pays for their consumption, with fixed and reduced rates compared to normal electricity charges charged by MSEDCL," a solar agency operator said, adding that the vendor and societies make an agreement for a fixed period after which the complete set-up is given to the housing society for free. The operator said, "If societies want to fund the project on their own, agencies also help them get a subsidy of Rs18,000 per kW from state govt." There has been a surge in demand from residential properties for solar system installation in the last one-and-a-half years, particularly after govt launched the 'PM Surya Ghar-Muft Bijli Yojana', said SunGet Solar Infra owner Dipak Kotkar. Under this scheme, consumers with individual flats or houses are provided financial assistance of Rs30,000 per kW project (which for society complexes is Rs18,000 per kW). "We had to increase our manpower after this scheme was launched as it has received a very good response. There is a need to simplify the process so that more people can apply for it," Kotkar told TOI. "For instance, the govt online portal keeps getting upgraded, so data of earlier applications is lost and needs to be constantly refilled. Further, there are no dedicated offline govt centres for troubleshooting glitches, only call centres," he elaborated. Confirming the reaction to the scheme, Sunil Kakde, chief engineer of MSEDCL Pune zone, said, "There has been a good response to the PM Surya Ghar-Muft Bijli Yojana from housing societies as well as individual households. Residents are widely utilizing the scheme mainly to power common facilities, such as water pumps and lifts, using solar energy. Govt provides 18,000 per kW subsidy to projects at housing societies up to 500-kW capacity. "
Business Recorder
24-05-2025
- Business
- Business Recorder
Pakistan budget 2025-26: Rs2.8 trillion defence budget proposed citing ‘war-like situation' with India
With Pakistan scheduled to unveil its federal government budget for fiscal year 2025-26, Tola Associates, a tax advisory and consultancy firm, has proposed to raise the defence budget to Rs2.8 trillion, reflecting a 32% increase as compared to the last fiscal, owing to a 'war-like situation' with neighbouring India. The tax advisory firm gave the proposal in its report 'Budget 2025-26 a rare catalyst for course correction', released on Saturday. 'The budgeted defence expenditure stood at Rs2,122 billion for FY25 while the actual expenditure till March 2025 was Rs1,424 billion. [However], due to the ongoing war situation with the neighbouring country, defence spending may increase by up to 50% in the Q4FY25,' read the report. The firms noted that in the previous three years, defence expenditure in the last quarter accounted for 36% of the annual total defence expenditure made throughout the fiscal year. Pakistan budget 2025-26: expenditure likely to fall by massive Rs2 trillion, says report 'Given the current regional tensions and the need to ensure Pakistan's defence preparedness, we estimate total defense spending to reach Rs2.4 trillion by June 2025.' Moreover, it also proposed to enhance the defence budget to Rs2.8 trillion in FY26, reflecting a 32% increase when compared with the outgoing FY's budget, 'due to the war situation with the neighbouring country and the new recruitment of army personnel'. In its report, Tola said that the upcoming budget serves as a great opportunity for course correction. 'It is a rare catalyst to realign the direction of our economy.' It said that the upcoming budget theme should focus on creating a balance between stability and economic growth. 'Therefore, economic and fiscal reforms should be framed in a manner that puts the economy on a path of steady growth.' Tola estimate the budget expenditure for FY26 to be around Rs17.2 trillion, lower than the Rs18.9 trillion budgeted by the government in FY25. The decline in expenditure comes amid an expected reduction in markup payments, which are likely to reduce to Rs7.5 trillion in FY26, compared to Rs9.8 trillion originally budgeted for FY25. IMF, govt to continue FY26 budget discussions 'over the coming days' The tax advisory estimated the federal development budget (PSDP/public sector development programme) at Rs950 billion for FY26, far lower than the Rs1.4 trillion budgeted in FY25. The report estimated the FBR revenue collection at Rs13.5 trillion for FY26. 'As per our estimates, if the FBR collects around 11.9 trillion in FY25, given our inflation estimates at 10.0% and estimated GDP growth at 3% in the upcoming FY26, then the FBR might collect only Rs13.5 trillion worth of tax revenue.
Express Tribune
27-03-2025
- Business
- Express Tribune
Deregulation boosts pharma profits by 210% YoY
Given that Covid-19 has pushed renewed focus on health, the demand for active pharmaceutical ingredients (APIs) has never been stronger. PHOTO: FILE Listen to article Owing to deregulated prices, Pakistan's pharmaceutical sector witnessed a remarkable surge in profitability, posting a 210% year-on-year (YoY) increase to Rs13.5 billion in the calendar year 2024, according to data compiled by Arif Habib Limited (AHL). The sector's net revenue increased by 21.1% YoY, reaching Rs196.8 billion, with leading contributions from AGP (+33.8% YoY), Glaxo (+23.2% YoY), and Abbott (+22.9% YoY), according to data gathered by AHL. "This 210% (or 3.1 times) YoY growth was driven by higher sales volumes and price adjustments following deregulation of drug prices," AHL analyst Menka Kirpalani told The Express Tribune. Gross profits also saw a significant increase of 64.9% YoY, reaching Rs68.6 billion, supported by better pricing strategies, currency stability, and lower active pharmaceutical ingredient (API) costs. Companies such as Glaxo (+339.2% YoY), Abbott (+67% YoY), and AGP (+44.4% YoY) played a key role in this expansion. The overall gross margin for the sector improved to 34.9%, with Hinoon (51.4%) and AGP (47.8%) leading the way. Net margins also increased to 6.9%, reflecting improved operational efficiency. The demand-side impact was negligible. Demand for pharmaceuticals and medicines naturally increases as the population grows, said Kirpalani. However, the main issue for the pharmaceutical sector was that their prices were regulated. Essential medicines were subject to a price cap linked to 70% of the Consumer Price Index (CPI) and non-essential medicines to 100% of CPI, meaning companies could only increase prices up to that limit. In February 2024, the government deregulated prices for the non-essential segment, allowing companies to adjust prices based on their own cost structures and profitability needs. As a result, gross margins improved, and volumes also increased. Previously, some products had stalled sales due to low marginsfor instance, Panadol was temporarily unavailable because companies were unable to maintain profitability under regulated pricing. With deregulation, both margins and sales have now increased, benefiting the industry. Despite the positive performance, finance costs grew by 4.7% YoY to Rs4.7 billion, mainly due to higher interest rates. Additionally, other income dropped by 44.4% YoY, impacting companies like Glaxo (-50.8% YoY) and Abbott (-51.6% YoY). Among individual companies, Glaxo reported a profit of Rs6.5 billion (+12.2 times YoY) with an EPS of Rs20.52, while Abbott recorded Rs5.2 billion (+20 times YoY) with an EPS of Rs53.46. Hinoon posted Rs3.2 billion in profit (+35.4% YoY) with an EPS of Rs61.41, and AGP reported Rs2.08 billion (+75.1% YoY) with an EPS of Rs7.44. However, Searl suffered a loss of Rs3.6 billion, facing operational challenges. Several companies, including Glaxo, Abbott, and Hinoon, announced dividends of Rs10, Rs10, and Rs40 per share, respectively, rewarding shareholders for the strong financial results.
