ISLAMABAD – Senate Standing Committee on Commerce on Tuesday noted that smuggling might increase following the government’s decision to impose ban on the imported commodities to avert pressure on the external sector of the economy.
The committee met under the chair of Senator Zeeshan Khanzada in parliament house. The committee discussed the government’s recent decision to impose ban on the imported items. It was informed that government has imposed ban in order to reduce the pressure on the local currency. The ministry of commerce informed the committee that Pakistan had also informed the World Trade Organization (WTO) on the decision of imposing ban on imported commodities. Secretary Commerce informed that government would review the decision after two months, as it is temporary decision. In few days, the situation will become clearer. He said that government might review the decision if situation on external sector of the economy improves. He further informed that substitutes of the imported commodities are available in the country. The government has established helpline and people could contact if they face any problems in this regard. He explained that government was compelled to take the decision as the currency is continuously depreciating against the US dollar from last few weeks.
Senator Zeeshan Khanzada noted that imposing ban on imported commodities is not solution of the problem. He said that decision might result in increase in smuggling. He expressed hope that decision of imposing ban on imported commodities would be temporary. Another, committee member Senator Saleem Mandviwalla said that there is need to review the regulatory duty regime. Later, the committee asked the ministry of commerce to present the details of the regulatory duty in next meeting. In order to control the soaring current account deficit, the government in last week had announced to ban import of 38 non-essential luxury items, which would yield $6 billion annual saving of foreign exchange reserves. Items included mobile phones, home appliances, fruits and dry fruits (except from Afghanistan), crockery, private weapons and ammunition, shoes, chandeliers and lighting (except energy savers), headphones and loudspeakers, sauces, ketchup etc, doors and window frames, travelling bags and suitcases, sanitary ware, fish and frozen fish, carpets (except from Afghanistan), preserved fruits, tissue papers, furniture, shampoos, automobiles and others.
The committee members noted that gap between country’s imports and exports is widening, which should be controlled. Secretary Commerce informed that only way to reduce the trade deficit is increasing exports of the country. Senate Standing Committee on Commerce also discussed the Public Sector Development Programme (PSDP) of the ministry of commerce for next fiscal year 2022-23. The committee was informed that Rs2.5 billion were approved for Peshawar Expo Centre. However, the government has not released even Rs100 million so far. The projected was supposed to complete in 2017. Now, the cost of Peshawar Expo Centre has increased due to delay in completion of the project. The ministry is once against seeking Rs2 billion under PSDP for the next fiscal year. The committee has recommended to earmark Rs400 million for Quetta Expo Centre.
Committee members were of the view that failure to complete projects in due time swells the cost of the project, adding that steps need to be taken so projects get completed on time with no delay and with minimal cost. The commerce secretary underscored that the devaluation of the rupee, increase in prices of petroleum products, disparity reduction allowance, increase in annual salaries of employees and increase in hiring for the accommodation of employees are the reasons for the 1.75 per cent increase in the budget of the Ministry.
The Committee also debated the mechanism and structure of the Export Development Fund (EDF). The secretary committee told the Committee that a proposal regarding EDF has been push forwarded to the Finance Ministry and waiting for their insight. The chairman of the Committee said that the proposal regarding the Export Development Fund which has been sent to the Ministry of Finance should also be presented to the committee so we can also have a look and after which the committee will give his recommendations if needed. The chairman of the Committee, Senator Zeeahan Khanzada sought a briefing on EDF from the Ministry in the upcoming meeting of the committee.