By Our Web Desk
ISLAMABAD– Minister for Finance and Revenue Dr. Abdul Hafeez Shaikh Tuesday said the Cabinet approved draft of State Bank of Pakistan (SBP) Amendment Bill 2021 to give absolute autonomy to the Central Bank.
Addressing a press conference, the minister said the Central Bank’s core objective was to control inflation and to fight increase in prices and the law also aimed at providing the Bank further autonomy to ensure that it fulfills its objectives of price stability with complete independence.
He said the law would also help SBP to independently fulfill the requirements of monetary policy and exchange rates without intervention of the the government. The term of Governor SBP, he said would also be extended to five years.
Hafeez Shaikh said the government would stop borrowing from the central bank so that the federal government could manage financing by its own resources or by lending from the commercial banks.
He said the monetary and fiscal coordination board would also be abolished and instead the government would arrange coordination through special committees.
The minister informed that the Governor would be appointed by the President of Pakistan and the Bank would only be accountable to the Parliament.
He informed that the second law approved by the cabinet was about Pakistan’s State Owned Entities (SOEs) that were engaged in business activities. The purpose of this law is to provide more authority to the SOEs by stopping intervention of the ministries and the ministers.
The board and the Chairman would be appointed by the government under a transparent and professional way and the CEOs of the institutions would appoint the boards, instead of the minsters so that professionalism in these areas should be promoted.
Hafiz Sheikh said the CEOs would be made more secure so they run their companies without any pressure to compete with the private sector.
Third law bill by the government, he said was about tax exemptions. Many companies and sectors are exempted from the taxes and to abolish such discrimination and to bring uniform system all such exemptions would be exempted under the law.
He said under Prime Minister Imran Khan’ vision to collect taxes in a way that poor people should not be affected, tax system is being reformed. He pointed out that these bills would be followed on fast track basis.
About International Monetgary Fund, Shaikh said Pakistan and the IMF were currently engaged to resume the Extended Fund Facility that was paused for few months due to COVID-19. “The IMF international Board would meet soon and financial lending for Pakistan will resume”, he added.
To a question, Shaikh said privatization was a difficult task and big investors were needed in this process. He said the privatization programme was being extended and the process was now resumed after a temporary halt due to COVID-19.
To another question, he said the government was minimizing gap between the income and the expenditure and the primary fiscal balance was in surplus of Rs 400 billion.
Besides, he said the government had also not borrowed a single rupee from the Central Bank nor it provided additional grants to the government departments. About inflation, he said the government had not control over the prices of such basic kitchen items which are imported from abroad.
However, the government in this regard can only do to provide assistance to the extreme people and it is providing financial support to over 15 million, he concluded.
