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Time of India
5 days ago
- Business
- Time of India
HAM (S): Oppn baffled by high growth rate of Bihar
Patna: Hindustani Awam Morcha (S) has flayed the opposition for attacking the NDA govt in Bihar on the development front. As the opposition alleges financial irregularities pointed out in the Comptroller and Auditor General (CAG) report, HAMS (S) national president and minister Santosh Suman on Friday said they were baffled by the high growth rate of Bihar under the good governance of the NDA govt. "The opposition allegations are baseless as they cannot see Bihar's GSDP increase by more than 10 times in the last two decades," Suman said. According to the CAG report tabled in the legislative assembly on Thursday, the state's GSDP in FY 2023-24 grew at 14.47% over the previous year and the revenue expenditure increased by 3.55% whereas its revenue receipts increased by 11.96% over the previous year. But the CAG report also pointed out that the state govt did not submit utilisation certificates of funds amounting to Rs70,877 crore. "The high pendency of utilisation certificates is fraught with the risk of embezzlement, misappropriation and diversion of funds," the CAG report said. CPI(ML) politburo member Dhirendra Jha said the CAG report has exposed the functioning of the state govt and its so-called development model. "The CAG findings are shocking and bring out a grim picture of institutional corruption, administrative failure and economic mismanagement in the state," he said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like She's 75 and Retiring - Her Handcrafted Jewelry Is 80% OFF Artisan Weekly Read More Undo The report also highlighted delays in the submission of detailed contingent (DC) bills, which are required to account for funds drawn using abstract contingent (AC) bills. As on March 2024, DC bills worth Rs 9,205 crore were pending against Rs22,130 AC bills. "Non-submission of DC bills within the prescribed period breaches financial discipline and enhances the risk of misappropriation of public money," the CAG report said. However, the minor water resources department minister said Bihar registered a growth rate of 14.47% in 2023-24, which was 4.87% more than the national average. "Bihar, which is running at a fast pace on the track of development, has consistently maintained its double digits growth, except for the Corona period," Suman said. He said Bihar's growth rate in 2022-23 was 15.30%. Citing the CAG report, he said all the allegations of the opposition regarding Bihar's backwardness have been proved baseless. Suman said the opposition should now stop misleading the people with their false propaganda and accept the ground reality. "Before 2005, Bihar's GSDP was only Rs82,490 crore, which has now increased to Rs8.54 lakh crore. The more than 10-fold increase in our GSDP in the last two decades has been possible only due to the good governance of the NDA govt and the ban on corruption and loot in the state. This is real development!" he claimed.
Express Tribune
17-07-2025
- Business
- Express Tribune
Govt signs fresh sugar export deal
Listen to article The finance ministry on Wednesday finally admitted that the International Monetary Fund (IMF) objected to Pakistan's tax exemptions on sugar imports. Despite this, the government has entered into yet another agreement with the Pakistan Sugar Mills Association (PSMA), allowing future sugar exports if total stocks exceed seven million metric tonnes. The new agreement, signed on July 14 between the minister for national food security and research and the all-powerful PSMA, aims to persuade millers to keep ex-factory sugar prices between Rs165 and Rs171 per kilogram until October 15. It signals that the government has not learnt from its earlier decision to allow the export of 765,000 metric tonnes, which triggered the current price crisis. Prime Minister Shehbaz Sharif's government had permitted the export of 765,000 metric tonnes, driving local prices up to Rs200 per kg. In order to stabilise prices, the government allowed tax-free imports of sugar, prompting sharp criticism from the IMF. "The government is discussing the sugar issue with the IMF," said Secretary Finance Imdadullah Bosal at a National Assembly Standing Committee on Finance meeting held Wednesday. PPP's Syed Naveed Qamar chaired the committee also said that the IMF was displeased with the government's decision to waive taxes on the import of sugar. "There are about 70 benchmarks in the IMF programme, and one of those is that tax exemptions cannot be given," Bosal explained, responding to a question on the nature of the IMF objections. Sources said that the IMF has plainly asked the government to revoke three statutory regulatory orders issued to waive taxes. The Express Tribune reported on Tuesday that the IMF had reacted to the major breach of the $7 billion programme and conveyed its reservations about import of sugar by waiving taxes in violation of written commitments. Federal Board of Revenue (FBR) Chairman Rashid Langrial justified the tax waiver by pointing out that total import duties on sugar amounted to 53%, making imports unaffordable. The waiver aimed to cut the import price of sugar by Rs82 per kg. Initially, the Trading Corporation of Pakistan (TCP) issued a tender to import 300,000 metric tonnes. After IMF's objections, the volume was reduced to 50,000 tonnes, and the bid deadline was extended from July 18 to July 22. MNA Jawed Hanif criticised the double standard, saying the government used the IMF as an excuse during budget debates but later breached the agreement itself. Bosal denied speculation that the IMF would demand new taxes on salaried individuals in exchange for sugar import waivers. PPP's Nafisa Shah remarked, "Vested interests are stronger than the IMF." The sugar export agreement states that "the federal government will allow, for export of sugar stocks exceeding seven million metric tonnes (carryover plus 2025-26 production), after 30 days of the closing of the crushing season 2025-26." This definition means even imported sugar, if not consumed, could count toward total stock. The stock verification will rely on FBR's track and trace system and be overseen by a four-member committee, one official each from the federal and provincial governments and two from PSMA. Critically, the agreement includes a price-fixing clause that contradicts Competition Commission of Pakistan (CCP) laws. It states, "The maximum ex-mill price of sugar will be fixed at Rs165 per kg on July 15, 2025, and increased by Rs2 per kg monthly until October 15, 2025." Before last year's sugar exports, ex-mill prices were below Rs140 per kg. By setting the maximum price at Rs171 per kg, excluding retail profit margins, the government is effectively granting a windfall to millers. Qamar said the government should exit the sugar trade entirely, including ending the licensing regime for new sugar mills. "There are sufficient stocks in the country," Qamar added. "Importing sugar sends the wrong signals to the market." He further said the government should only regulate wheat, not sugar. "Sugar remains a highly regulated commodity, while wheat has been deregulated," he said. Other matters The committee also reviewed two key private member bills: the Corporate Social Responsibility (CSR) Bill, moved by Nafisa Shah, and the Parliamentary Budget Oversight Bill, proposed by MNA Rana Iradat Sharif Khan. The CSR bill proposes that companies contribute 1% of net income toward social welfare. However, the secretary finance opposed the bill, claiming it would raise the cost of doing business. Committee members rejected this argument, noting the levy targets net income, not sales. Nafisa Shah argued that many companies already allocate around 1.5% to CSR voluntarily and support the bill. Despite this, the finance ministry requested a one-month consultation period with stakeholders, which the committee said was unnecessary. Qamar also formed a sub-committee to further evaluate the Parliamentary Budget Oversight Bill, aimed at enhancing budgetary accountability. While Secretary Bosal expressed reservations against the bill, Qamar stressed that while the oversight bill may challenge the bureaucracy's fiefdoms, the proposed legislation is important for the improvement of the overall system.
Express Tribune
16-07-2025
- Business
- Express Tribune
Crisscross with Fund
Listen to article Days after the IMF praised Pakistan for 'strong performance' under the Extended Fund Facility (EFF) programme, a subsequent rejoinder from the Fund has put the loan-recipient country in an embarrassing situation. The Washington-based lender is unhappy with the import of sugar and that too by setting aside conditionalities that were part of the $7 billion bailout terms. It believes Islamabad has bypassed it by waiving taxes, and that is tantamount to a breach. This has landed the beleaguered government, which has not been able to fix the economic rot, in a catch-22 situation. And apparently, it is contemplating a damage control exercise which pertains to backing out of the imports entirely and withdrawing the tax waiver for the private sector. The government's decision to import 500,000 metric tonnes of sugar was a fallback on its bewildering nod to export the sweetener to the tune of 765,000 metric tonnes. Many see it as a deliberate move to appease the wheeler-dealers in the sugarcane mafia and that also encompasses many in the corridors of power. Though this has become an established norm in our torpedoed state of governance, this time around it was found to be on the wrong side of the divide as it violated a written agreement with the IMF not to grant preferential tax treatment or engage in commodity purchases. While the authorities tried to take a leave under the plea that the 'tax-free sugar import' was justified due to a food emergency, the lender has refused to entertain it. It is perplexing to note that the government went ahead with the export-import trial despite the finance ministry's assessment, which had forewarned of "detraction" by two breaches. The tax waiver, it is argued, was intended to reduce the imported sugar price by an estimated Rs82 per kilogram. It remains to be seen how this mistrust will be undone, and whether the next tranche will be a victim of this mismanagement. All that is desired is to win back the confidence of the Fund, and to ensure that the reforms and growth target set are achieved. That is the only way to free the fragile economy from a new programme in duress.
Express Tribune
14-07-2025
- Business
- Express Tribune
IMF slams tax-free sugar import
The International Monetary Fund (IMF) has reacted to a major breach of the $7 billion programme and conveyed its reservations about the government's decision to import 500,000 metric tonne of sugar by waiving taxes, in violation of written commitments. The development came as sugar prices officially hit Rs200 per kg for the first time in the country's history, according to the Pakistan Bureau of Statistics' (PBS) inflation bulletin released last Friday. Government sources told The Express Tribune that the IMF did not accept Pakistan's plea that the tax-free sugar import was justified due to a food emergency. The Federal Board of Revenue (FBR) had written to the IMF on behalf of the government. The supply situation tightened due to the government's earlier decision to export 765,000 metric tonnes of sugar. Sources said the IMF's reaction aligned with the finance ministry's assessment, which had forewarned of the $7 billion programme being "detracted" by two breaches. Pakistan is now in serious breach of the IMF programme after it violated written commitments not to grant preferential tax treatment or engage in commodity purchases. The Ministry of Finance, FBR, and IMF did not officially comment on the development. However, officials involved said the IMF had taken exception to the government's move to bypass it when deciding to import sugar, breaching two programme commitments. This marks the first test for the new IMF Mission Chief to Pakistan, Eva Ghirmai, and how she handles the situation. The government bypassed the IMF and swiftly waived taxes and issued an import tender, a move likely to create further mistrust between both sides, said the sources. Last week, the federal cabinet approved the import of 500,000 metric tonnes of sugar, waiving nearly all applicable import taxes to mitigate the negative impact of its earlier decision to allow sugar exports. The tax waiver was intended to reduce the imported sugar price by an estimated Rs82 per kilogram. With all applicable duties and taxes, the import price is estimated at around Rs245 per kg, though the exact price will be known once the government receives bids by this Friday. Federal Minister for National Food Security and Research Rana Tanveer Hussain stated that, due to a food emergency, the federal cabinet approved the import of 500,000 metric tonnes of sugar to stabilise local prices with immediate effect. Following the cabinet decision, the FBR issued three notifications to completely waive import duties and apply a nominal 0.25% sales tax and withholding tax rate, mainly for record-keeping purposes. The tax waivers apply to both private importers and the Trading Corporation of Pakistan (TCP), in breach of the IMF agreement. According to the FBR notification, "Pursuant to the Cabinet Decision, the withholding tax under section 148 shall be collected at the rate of 0.25% of the value of commercial import of sugar up to 500,000 tonnes by Commerce Division through TCP or private sector." The sales tax rate was reduced from a cumulative 21% to 0.25%, and duties were fully exempted. IMF programme documents state, "Do not grant tax amnesties, and do not issue any new preferential tax treatment, including exemptions, zero rating, tax credits, accelerated depreciation allowances, or special rates." The government proceeded with the sugar import despite its commitment to the IMF to phase out federal and provincial price-setting for agricultural commodities by the end of FY2025-26. The TCP has already issued a tender to import 300,000 metric tonnes of sugar, with a bid submission deadline of July 18. The government also committed that by December 2025, it would review relevant legislation underpinning market interventions and prepare recommendations on addressing issues like market abuse and anti-competitive behaviour through competition policy and less protectionist trade policies, according to sources. Sources said that after the cabinet waived taxes via circulation of the summary, the finance ministry raised objections with the Prime Minister's Office. According to insiders, the finance ministry stated that the summary for sugar import was approved by the Cabinet without input from the finance minister. The finance minister, last week, did not respond to a request for comment on whether he raised the issue with the prime minister. Sources said the ministry informed the PM that the waiver of duties and taxes on sugar imports violated Pakistan's agreement with the IMF. It reiterated that the government had agreed not to issue any new tax exemptions or preferential treatment. The ministry's concern was that these breaches could detract from the IMF programme. Sources said that, following the IMF's response, the government was evaluating options to manage the situation. These include TCP backing out of the imports entirely and withdrawing the tax waiver for the private sector. However, no final decision has been made. Sources added that the food minister again met with the Pakistan Sugar Mills Association (PSMA), which assured him it could meet domestic needs by starting the crushing season early. The government anticipates a sugar shortfall of 535,000 metric tonnes in OctoberNovember this year. The government of Prime Minister Shehbaz Sharif had earlier exported 765,000 metric tonnes of sugar, which pushed local prices from under Rs140 to Rs200 per kg.
Express Tribune
03-07-2025
- Business
- Express Tribune
New levies to raise fuel oil prices
OCAC urged the Special Investment Facilitation Council to intervene and recommend the withdrawal of petroleum and climate support levies on furnace oil, which would help restore policy consistency and support critical sectors. PHOTO: FILE Listen to article The Oil Companies Advisory Council (OCAC) has cautioned the Special Investment Facilitation Council (SIFC) that the climate support and petroleum levies on furnace oil have become effective from July 1, 2025, which will raise its price by over 80%, making many industries, shipping services and independent power producers (IPPs) unviable. In a letter sent to SIFC, OCAC Chairman Adil Khattak said that the advisory council and its member companies had expressed deep concern and protested over the imposition of petroleum levy of Rs82,077 per metric ton on furnace oil through the Finance Act 2025. "This levy, in addition to the Climate Support Levy of Rs2,665 per metric ton, poses a serious threat to the overall business environment," he said. "While we acknowledge and appreciate the support extended by the Special Investment Facilitation Council in securing an interim relief from the government – through the recovery of inadmissible general sales tax (GST) on petroleum products via the inland freight equalisation margin (IFEM), this remains a temporary measure with limited scope," he said and demanded a sustainable solution by restoring the taxable status of currently exempt petroleum products, ie, motor spirit (petrol), high-speed diesel (HSD), kerosene oil and light diesel oil (LDO). He called SIFC's continued support pivotal until full and permanent resolution of the matter. Khattak stated that the abrupt imposition of levies on furnace oil without prior consultation with the industry reflects a complete disconnect from the economic and operational challenges being faced by the sector. Furnace oil is a deregulated product and its pricing is governed by market forces. It is mainly used to meet energy needs of the domestic industry. "The imposition of such a substantial fiscal burden will have widespread and adverse financial repercussions across multiple business sectors, threatening their viability and long-term sustainability," he remarked. OCAC said that the new levies would increase furnace oil prices by approximately 80%, making its use economically unviable for key industries such as cement, shipping, textile, glass, tyre manufacturing, large-scale industrial units, foundries and other sectors reliant on boilers and furnaces (commonly referred to as general trade). This drastic price increase would eliminate domestic furnace oil demand and cause a sharp decline in industrial activity, potentially resulting in partial or complete operational shutdowns, especially where no viable fuel alternatives exist, it warned. In the letter, OCAC underscored that this measure was in direct contradiction to the government's stated commitment to promoting domestic manufacturing. Rather than enhancing revenues, it is likely to significantly reduce or eliminate furnace oil sales within the country, thereby slashing associated sales tax revenues and undermining industrial competitiveness. "It will also defeat the objective of collecting the envisaged revenue through the imposition of petroleum and climate support levies." In the absence of domestic demand, the advisory council said, local refineries would be forced to export furnace oil at a considerable financial loss. This will further strain the financial condition of Pakistan's refining sector and compromise its sustainability. It pointed out that the government had recently renegotiated tariffs with furnace oil-based IPPs but the new levies would substantially increase fuel costs, pushing those plants lower on the merit order and rendering them inactive. "This will nullify the gains from recent renegotiations while still obligating the government to make capacity payments, effectively increasing the burden on national finances." In light of the above, OCAC urged SIFC to intervene and recommend the withdrawal of petroleum and climate support levies on furnace oil. It believes this will help restore policy consistency, support critical sectors of the economy and uphold the principles of fair and sustainable economic development. "We remain committed to engaging in constructive dialogue and are available for an urgent meeting to further discuss this matter in the national interest," the OCAC chairman added.
