KARACHI: The nation welcomed a record $15.83 billion in remittances from overseas Pakistanis in fiscal year 2013-14, an increase of 13.7 per cent over the previous year.
The continually lifting up remittances have now become the second biggest source of dollar inflows in the country after export proceeds.
Nevertheless, incentives given to banks on higher remittances played a key role. It was likewise noted that the number of skilled Pakistani professionals in the Middle East has increased thus remitting more foreign exchange to the country than unskilled manpower.
The highest amount was sent from Saudi Arabia, which reached $4.729bn, 30pc of the total remittances. Currency experts and traders think that high remittances during Ramazan could lead to a total $2bn alone in this month.
Later than, on Thursday, many years of low growth, sentiments about the economy appear to deliver improved, said State Bank of Pakistan Third Quarterly Report for FY14 issued.
Report stated that revival of economic activity is a central development in FY14, with real GDP increase of 4.1 percent, which is the highest in the past five years.
The policy makers should develop an Industrial Policy that prioritizes production efficiency and task creation. Such capability should focus on: efforts to boost competitiveness, instead of a culture that creates and rewards inefficiencies; restructure loss-making PSEs (especially Gencos and Discos in the power sector; and PIA and Railways in the transportation sector) to create them more active and profitable; and create a skilledlaborr force that fills the current (and likely) needs of the manufacturing sector.
Granting to the Report, the recent influx of external resources not only stabilized the exchange rate, but also sharply increased SBP’s FX reserves, “as of 30th compared to merely $3.5 billion as of end-December 2013.
The rate of GST on services is 16 percent, compared to 17 percent in the remainder of the nation. The base of the sales tax on services is wider in Sindh (150 services) compared to the Punjab (105 servings). Services offered by the fiscal sector, hotels, eating houses, advertising agencies, professional and consultants, and couriers, are almost fully hidden in both these states.
The Government mainly relied on domestic sources during Jul-Mar FY14 – on the funding side. Nevertheless, external funding has increased subsequently with the issuance of Eurobonds, fresh loans from the IFIss, and bilateral aid.
While this has been complemented by the devolution of spending responsibilities, the significant increase in the provincial percentage of federal revenues, in the absence of binding fiscal targets for provincial revenue generation, may discourage them to increase their own revenue generation efforts, it totaled.
SBP has suggested that this peculiarity should be brought into account, while settling the new NFC award with the states.