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ISLAMABAD: Pakistan’s national budget for the new fiscal year, which has been termed by the opposition as ‘for Rich-men’ — yet zestfully phrased by the Jamali-led government ‘as a podium to usher-in a fabulous era of peace, progress and prosperity — with a lot of incentives to the agriculture and industries’ was set off by the Finance Minister, Shaukat Aziz in the National Assembly on Saturday with an outlay of 903 billion rupees — which is equivalent to almost US $ 15 billions.

Though the common man gets prima facie a little direct relief, the country’s agriculturalists and industrialists shall have a lot of incentives for expansion as a result of which the poor class shall also eventually accrue multiple advantages — with job opportunities atop. Items of daily use are also expected to receive a stable price index which would ultimately make the trends of price hike — evaporated.

Whereas the electricity tariff for commercial consumers has been dropped to a great extent, the domestic users shall simultaneously shall have a benefit of paisa 10 per unit.

Tax relaxation to the producers of multiple goods, mostly which are meant for export shall bear visible positive signs on the nations’ economy, which has been facing frequent upheavals due to instable polity of Pakistan in the gone-bye epoch.

To compete with the rest of the world, IT gets a nice priority with slashing of mobile phone activation fee by over 50 per cent.

In-depth

Pakistan's first Independent Complete Daily newspaper on the Web, 'Pakistan Times' understands that the total outlay of the budget is over 9 trillion rupees out of which Rs.202 billion for development expenditures and Rs.700 billion for non-development expenditures have been allocated.

The national assembly after completing its discussions on new financial year budget 2004-05 is expected to approve it on June 28.

For seven days fixed for discussions on the budget, national assembly in its morning and evening sessions would continue to meet and discuss the budget threadbare. Besides, discussions on the budget would also be held during private members day.

Budget presented to Cabinet

Earlier, the Federal Budget 2004-05 was presented to the Cabinet upon which the discussions took place till last minute with micro details.

With Cabinet's approval, the budget was presented in National Assembly, the Lower House of Pakistan’s Parliament.

Rs 963 allocated for Defence Division

Under the Public Sector Development Programme 2004-05 Rs 963 million have been allocated for the 12 on-going and 4 new projects of the
Defence Division.

The PSDP allocations include Rs 1.99 million for award of merit scholarship to students of FGEIs in Cantt and Garrison in the on-going schemes sector.

The other ongoing projects include, Islamabad Institute of Space Technology Phase-II Rs 29 million, National Centre for Remote Sensing and Geographical Information System, Karachi Rs 55.70 million, Establishment of FG Degree College for Boys at multan Rs 19.66 million, and Provision of Physical Facilities in FG Girls Degree College Kharian Cantt. Rs 10.06 million.

Besides, Expansion of 5 FG Primary School at Peshawar, Rawalpindi, PMA Kakool, Karachi and Quetta Rs 14.91 million, Establishment of Special Computerized Weather Analysis Centre, Hotel and Residencies at National Agro Met Centre Islamabad rs 19.22 million, PAKSAT-I (Phase-I) Rs 312.50 million, PAKSAT-IR Feasibility and System Definition Study Rs 4.50 million, Establishment of R & D Division at Met Headquarters Islamabad Rs 19.95 million, Huma Resource Development for NSDP (Phase-I) Rs 80.20 million and Establishment of a National Centre for Drought/Environment Monitoring and Early Warning at Islamabad rs 60 million.

In the new projects sector for Earth Observation Satellite System (Feasibility and System Definition Study) Rs 65 million, Establishment of FG Liaqat Ali Degree College for Boys, Rawalpindi Rs 10 million, Centre for Excellence for Advanced Engineering Research , Islamabad Rs 175 million and Training in Advanced Engineering and Technologies Rs 85 million.

NHA gets major chunk for N5, M1 and Lowari Tunnel

The completion of country's road communication network gets top priority of the government during the next financial year and a major chunk of funds allocated for Transport and Communication sector goes to the National Highway Authority NHA.

The PSDP envisages an allocation of Rs 35052.17 million for the sector during 2004-05 as against a revised expenditure of Rs 34646.55 million during 2003-04.

The allocation includes Rs.17932.17 million for the Budgetary Programme and Rs.17120.00 million for the Budgetary Corporations Programme (NHA).

Priority Areas

The priority areas are dualization of National Highway (N-5) on different Sections, Islamabad-Peshawar Motorway (M-l), Mekran Coastal Road, Karachi Northern Bypass, Lyari Expressway, Islamabad-Muzaffarabad Road (N-17), Mansehra Naran-Jalkhad Road, Dera Allahyar-Nutal Sibi Section (N-65), Ratodero / Shahdadkot-Khuzdar Road, Qilla Saifullah-Loralai-Bewata Section (N- 70) & KKH (N-35) Bridge on River Jhelum at Azad Pattan.

Work on Lowari Tunnel project will be initiated besides completion of remaining sections of Gwadar Ratodero Road (Khuzdar-Khori, Ratodero-Quba Saeed Khan & Gwadar- Turbat) and remaining portion of Indus Highway (N-55) (Sehwan-Dadu, Dadu-Larkana, Rajanpur D.G.Khan & Malana Junction-Sarai Gambila Sections).

Work will be initiated on realignment of Jacobabad – Dera Allah Yar section of National Highway N-65, improvement of N-65 from Jacobabad Bypass to Shikarpur, Quetta-Kalat-Chaman road, Quetta Western bypass, two interchanges on motorway M-2 at Khanqah Doghran & Sial Mor and the National Highway improvement programme co-financed by World Bank.

An allocation of Rs.125.00 million has been made for 25 new un-approved projects for smooth and safe flow of vehicular traffic on national highways.

PR's Track Rehabilitation

An allocation of Rs.9280.60 million has been made for continuation of work on Track Rehabilitation of Pakistan Railways Network, procurement of 69 Diesel Electric locos, procurement and manufacture of 175 Passenger Coaches, procurement of 1300 Bogey High Capacity Wagons and rehabilitation of 450 passenger coaches and other on-going projects.

Work on installation of air-brakes to 574 bogey wagons and recommissioning of 55 stabled DE locos will be undertaken.

An allocation of Rs.6227.00 million has been made to expedite work on the Gwadar Deep Sea Port Project in Balochistan. Of this Rs.5215 million are for the Sea Port, expected to be completed during the 2004-05 while an additional amount of Rs.1000.00 million has been allocated for deepening of the channel and installation of gantry cranes at Gwadar Port to enable it to handle bigger ships for transshipment. Remaining work on ice cold storage and desalination plant on
the Gwadar Fish Harbour-cum mini port will be completed to make it fully functional.

An allocation of Rs.18 million has been made for NTRC for research programme and Pakistan Transport Plan Study in collaboration with JICA.

Special Communication Organization

An allocation of Rs.891.35 million has been made to the Special Communication Organization (SCO) for GSM project for AJ&K and the Northern Areas, International Gateway Exchange & Earth Station for AJ&K and the Northern. Areas, Rural Digital Communication Uplift Project for AJ&K (Phase-II), provision of Optic Fibre Cable in Northern Areas (Mansehra-Gilgit), provision of 15,000 Local Telephone Outside Plant (OSP) in major Cities and Town of Northern Areas, Laying of Optical Fibre Cable (OFC) along with Transmission System between Gilgit and Skardu and Expansion 7
Improvement of Telecommunication Facilities in Northern Areas (Phase-II).

An allocation of Rs. 99.00 million has been made for upgradation of National Frequency Management and Monitoring System project and will be completed during 2005-06.

An allocation of Rs.325.00 million has been made to National Telecommunication Corporation (NTC) for Establishment of Optical Fibre based Transmission Link for establishing Coastal Communication Link, Hosting of GoP Portal and Government websites and De-Regulation Facilitation Unit Project of Ministry of Information Technology.

An allocation of Rs.300.00 million has been made for Up-gradation and Expansion of Existing NLC Communication Network.

An allocation of Rs 40.OO million has been made to complete the remaining work on the World Bank financed project - Trade and Transport Facilitation Project for establishment of multi-modal transport system and redrafting of laws for streamlining procedures for ports and custom clearance and freight forwarding.

SUPARCO

The SUPARCO received an allocation of Rs.382.00 million for payment of the next installments of the lease fee and operational cost of PAKSAT-I project to M/s Hughes Global System and to undertake tow feasibility studies for new projects namely PAKSAT-IR Feasibility and System Definition Study (FSDS) and Earth Observation Satellite System (EOSS) Feasibility and System definition Study (FSDS).

The Pakistan Meteorological Department will be allocated Rs.19.224 million to complete Special Computerized weather analysis centre, hostel and accommodation at the National Agrometeorological Centre.

Rs.350 million have been allocated for procurement of container scanner equipment for installation at Airports.

Rs 925 mln for Women development Projects

An amount of Rs 925 million have been allocated for the Women Development Programme in Public Sector Development Programme (PSDP) 2004-05.

According to PSDP issued by the government, for the normal women development programme, an amount of Rs 140 million have been allocated, where as about Rs 300 million for Tawana Pakistan Project, Rs 385 million and Rs 100 million for Gender Reform Action Plan and National funds for Advancement of Rural Women respectively.

For Tawana Pakistan Programme, an amount of Rs 200 million has been recommended in the PSDP which has been enhanced to Rs 400 million by the APCC to achieve its objectives and also complete the programme in time. During this year, it is planned to cover all the 530,000 students in 29 districts of the country. Feeding and administration of micronutrients and albendazole would be carried out in 5300 girls primary school.

For the social welfare sector programme, major emphasis during the next financial year will continue to be on the completion of ongoing projects. Some important initiatives in the PSDP 2004-05 include the development of a park for disabled in Islamabad, National Training Centre for Special Persons at Islamabad, National Library and Resource Centre in Islamabad and construction of Special Education Centre at Gilgit, Okara, Kohat and Hyderabad. All these projects have been funded promptly and it is expected that these schemes will be completed by June 2005.

An allocation of Rs 335.512 million has been allocated for the promotion of special education and social welfare sector.

Industries division gets Rs 392.43 million

The government has allocated an amount of Rs 392.432 million including Rs 71.092 million of foreign aid component in the Public Sector Development Programme (PSDP) 2004-05 for the new and on-going projects under the Industries and Production Division.

The PSDP allocations for the new projects included Rs 180 million for Upgradation of Plastic Technology Center, Karachi; Rs 115 million for Modernization and Upgradation of Pakistan Industrial Technical Assistance Center (PITAC), Lahore and Rs 5 million for Upgradation of Automotive Testing and Training Center Limited, Karachi.

Under the ongoing projects the PSDP allocations included Rs 92.432 million for Balancing and Modernization of Workshop Facilities at PITAC, Lahore.

All these projects are to be completed at an estimated cost of Rs 1532.1 million including Rs 1432.7 of foreign aid, with Rs 183.3 million utilized upto June 2004 in expenditures and Rs 1348.8 million carried as throw forward.

Higher Education gets 100% Increase

The government has doubled the allocation for higher education sector in PSDP 2004-05, earmarking Rs. 9.104 billion against Rs. 4.477 billion last year.

The allocation includes Rs. 5.221 billion for ongoing and Rs. 3.883 billion for new projects.

According to Annual Development Plan (ADP) 2004-05, the main emphasis would be laid on human resource development and faculty development by initiating masters, M.Phil, PhD and post- doctoral programmes at indigenous and international level.

The scholarship programs are being developed for students to attain Ph.D degrees both within, as well as outside the country.

An innovative programme is the hiring of expatriate Pakistanis serving as faculty members and researchers at premier teaching and research institutions of the world.

Scholarship schemes to Continue

The ongoing scholarship schemes would be continued and new scholarship schemes will also be initiated to train student in key areas.

The other areas of focus regarding infrastructure include physical infrastructure, electronic access highway, digital library programme, curriculum and distance education mechanism.

The universities will be encouraged to send their students on internship to industry and public/private sector organization to gain practical experience.

The universities will also be encouraged for entrepreneurship, which includes support for the teaching of entrepreneurship related skills at universities, setup of subsidized research and development facilities and support for the setup of a venture capital fund dedicated to promoting relevant projects showing great promise.

The universities will also be assisted in identifying areas requiring reform, identifying best practices, and suggesting mechanisms for improvement.

The central resource facility would be provided to all university faculties to assist them with the development of research projects, negotiate research contracts and enhance the ability of the faculty to attract research and development grants.

An amount of Rs 4.477 billion was allocated to higher education during 2003-04.

In the mid-year review of PSDP 2003-04, this allocation was further increased by Rs 490.88 million making higher education allocation to about Rs. 5 billion.
Rs.202 biln for poverty reduction, good governance, creating jobs

Government has earmarked Rs. 202 billion for development projects in the new budget aiming at reducing poverty, ensuring good governance, generating employment and raising the quality of social services.

Public Sector Development Programme (PSDP) which includes Federal Rs. 148 billion and Rs. 54 billion for the provinces also carries a foreign aid component of Rs 35 billion.

The PSDP 2004-05 has been formulated within the framework of the basic policy agenda of the government, which includes reducing poverty, ensuring good governance, generating employment and raising the quality of social services.

Towards this end, the programme aims at laying a firm basis for enhanced future growth through investments in infrastructure and human resources.

Major projects

To avoid a thin distribution of the resources, and consequent time and cost overruns, priority in the allocation of resources has been given to those projects scheduled for early completion commitments for major projects.

These projects includes Chashma nuclear power plant, raising of Mangla dam, lining of water courses, important communication projects including Gwadar Port and Gwadar area development, have been catered to in addition to the important social sectors.

Further, the government would consider guarantees in appropriate case for corporations such as WAPDA and the NHA to arrange additional resources outside the budgeted programme to complete projects on schedule.

The federally funded provincial projects have also been funded for completion in the light of priorities assigned to them.

Agricultural Growth

To accelerate agriculture growth and to meet its water requirements, not only has the allocation for the water sector been substantially increased, major investment is programmed for the improvement of water courses to conserve scarce water and put it to productive use.

Likewise, adequate allocations have been provided to road and power sector projects to meet the transport and energy requirements of trade & industry.

Social sectors such as education, higher education, health and population welfare have been given enhanced funding to strengthen the economy's knowledge base and to produce qualified manpower required for higher growth in subsequent years.

Rs 4929.634 million for projects under Interior Division

An amount of Rs 4929.634 million has been earmarked under Public Sector
Development Programme 2004-05 for various new and ongoing projects of the Interior Division.

The amount will be spent on 48 ongoing projects and 43 new projects to be completed in various parts of the country.

The Government allocation in the total amount of Rs 4929.634 million is Rs 4435.739 millon while the foreign component will be Rs 493.895 million.

The major new projects in the financial year 2004-05 include raising of Balochistan Constabulary throughout the provinces, which would be completed with an expenditure of Rs 1000.000 million.

In the new financial year, the Interior Division has allocated a sum of Rs 295.000 million for procurement of fire-fighting vehicles for Islamabad.

An expenditure of Rs 250.000 million has been allocated for improvement of environment by Solid Waste Management in the capital. The project will be
completed with the assistance of Rs 50.000 million Japanese assistance.

Islamabad Highway

Another major project will be the addition of third lane to Islamabad Highway from Zero Point to Faizabad Interchange, to be completed at a cost of Rs
125.000 million.

Among the ongoing projects, an amount of Rs 475.000 million has been allocated the Machine Readable Passport Project.

A healthy amount of Rs 1000.000 million would be spent conversion of B Area into A Area in 25 Revenue Districts of Balochistan.

The Interior Division will spend Rs 131.862 million on Personal Identification, Rescue Combat Evaluation System (PIRCES) during the financial year 2004-05.

Park Road of Islamabad will be dualized with an expenditure of Rs 150.000 million during the new financial year.

An amount of Rs 175.000 million on setting up Forensic Science Agency, Islamabad and provincial capitals.

The dualization of IJ Principal Road from Faizabad to Pirwadai at the cost of Rs 101.682 million during the year.

Increased Allocations for IT Sector

The IT and Science and Technology sectors have also received increased allocations to give a spur to research and development and to employ the uneducated unemployed.

The size of the federal PSDP 2004-05 has grown by 31% over the previous year which in most part is devoted to physical and social infrastructure to support higher growth and retain the focus on poverty reduction.

Rs.8.011 bln set for physical planning, Housing

The government has earmarked Rs.8.011 billion for physical planning and housing sector in PSDP 2004-05, showing a 36 per cent increase than the last year.

According to Annual Development Plan (ADP), Rs. 2.918 billion has been allocated for water supply and sewerage while for urban roads and development Rs. 1.56 billion has been earmarked.

Similarly, the government has allocated Rs. 1.689 billion for offices and buildings, Rs. 501 million for government servants housing schemes and Rs.1.343 billion for various other schemes.

The sectoral size of Public Sector Development Programme (PSDP) in 2003-04 was Rs. 9.911 billion out of which Rs. 6.2 billion or 62 per cent was for Federal projects and Rs. 3.711 billion or 38% for the provincial projects.

The major sectoral issues include severe housing shortage, low water supply and sanitation coverage, and haphazard growth of cities and towns.

The government will continue to facilitate private sector for the construction of houses and flats by providing trunk infrastructure and ensuring adequate credit.

The programmes including water supply and sanitation services, government offices and buildings, government servants housing, development of Federal Capital Islamabad and regularization and improvement of Katchi Abadis and slums are being funded through PSDP 2004-05.

Special areas, KANA, SAFRON division get Rs. 11.245 bln

Special areas including KANA and SAFRON Division have been allocated an amount of Rs. 11.245 billion, with Rs. 906.88 million of foreign aid component, in the Public Sector Development Programme (PSDP) 2004-05, to bring these areas at par with rest of the country.

The PSDP allocations for special areas included Rs. 4463 million for Azad Kashmir, Rs. 2770.9 million for Northern Areas, Rs. 4000.194 million for FATA (including Special Programme and two Dams in Waziristan) and Rs. 11.178 million for improvement of Management Plan of Khunjrab National Park, Gilgit.

This allocation is about 20 percent over and above than the corresponding year's allocation of Rs 9355.54 million.

However, the estimated utilization of Rs 10.586 billion upto June 2004 was higher than the allocations due to provision of additional allocations of Rs 1091 million for FATA and Rs 140 million for AJK.

Rs. 6463.356 mln allocated for Health

An amount of Rs. 6463.356 million has been allocated under Public Sector
Development Programme (PSDP) 2004-05 for the health sector including foreign aid of Rs. 892.682 mln.

The budget allocation shows an increase of 37% (Rs.1751.356) over the last year's allocations and the total outlay set aside for Health Division is Rs. 6044.556 mln which is 38% more over the last year's allocation with major allocation going to preventive programmes.

The physical targets during the year are addition of 1000 hospital beds, graduation of 4800 doctors, 360 dentists, 3000 nurses and 5000 paramedics.

Under the immunization programme 70% of children will be vaccinated against seven communicable diseases while management of diarrhoea through ORS will continue by provision of 17 mln ORS packets.

Funds for mass media drop from Rs 549 million to Rs 500 million

The Public Sector Development Programme (PSDP) envisages an allocation of Rs 500 million for the year 2004-05, down from the revised estimates of Rs 549 million allocated last year.

The original allocation for last year was Rs 563.137 million, however the revised estimates are Rs. 549 million.

For 2004-05 the Mass Media has been allocated Rs 500.00 million, including Rs 465.400 million for PTV, Rs 30 million for PBC and Rs 4.6 million for Department of Films and Publications.

During the year up-gradation and modernization of equipment at all PTV centers will continue and Rs.286.40 million for the year 2004-05 for purchase of equipment has been allocated.

Seven re-broadcasting centers (RBC)in AJK will be completed. Rs 70.950 million have been provided for Muzaffarabad TV station.

The on-going projects of re-broadcast stations at Umerkot and Qilla Saifullah have been earmarked Rs 15.00 million each for civil works.

Second TV Channel Phase- III has been provided token allocation of Rs 5.00 million. Rupees 73.05 million have been allocated for seven RBCs located in FATA one each at South Waziristan, Mohmand Agency and Orakzai, and Ziarat, Pooran, Besham (Maira) and Shakargarh.

An amount of Rs.30 million for civil works has been provided for Pakistan Broadcasting Corporation's project of 100 KW MW transmitter and BH Turbat.

The Department of Films and Publications has been allocated Rs 4.600 million for conversion of 35 mm films to DVD.

Electricity tariff slashed

Finance Minister announced reduction in power tariff for the domestic, commercial and industrial consumers.

The domestic consumers have been given 10 paisas per unit reduction, while 25 paisas relief has been extended to commercial users and 58 paisas to the industrial consumers.

15 percent adhoc relief for govt employees; 16 per cent for Pensioners

The Finance Minister announced 15 percent adhoc relief for the government employees with the promise that newly constituted Pay and Pension Committee will finalize its recommendations in six months.

The Minister announced the constitution of the Pay and Pension Committee which would finalize its recommendations to increase the pay and pension of government servants within six months.

He said, meanwhile we are giving adhoc relief of 15 percent to the government employees which would be adjusted accordingly when the government would receive final report of the Committee.

The Minister also announced adhoc relief for pensioners. He said, the government
employees retired before 1994 would get 16 per cent increase while the
persons retired from service after 1994 would get 8 per cent adhoc relief.

Special task force for Pensioners

Shaukat Aziz announced that a task force has been set up for Pension Reforms which will review the current outdated system and present fresh proposals to improve the system.

He said the report of the task force will be presented by Jan 2005 and take into account ways and means to provide better returns to the pensioners.

He said assistance will be sought from private asset management companies will be utilized to offer better incentives to the pensioners.

Activation charges on cell phones cut down to Rs 1000

Shaukat Aziz announced reduction in sales tax on activation of cell phones from Rs 2000 to Rs 1000.

"To further increase the use of cellular phones in the country, it is proposed to reduce the activation charges on mobile phones from Rs. 2000 to Rs.1000", Aziz said.

He said, this reduction will significantly contribute in the spread of this means of communications into the low income groups as well as in the rural areas.

It is hoped that cellular phone companies will follow this example set by the government, for promotion of this sector, by rationalizing their air-time charges to encourage greater usage among their subscribers, the Finance Minister added.

Minimum tax rationalization for ghee, cooking oil Units

The Finance Minister also announced tax measures to encourage local production of edible oil.

Ghee, cooking oil units pay minimum tax at the rate of 3% on import of edible oil which is adjustable against final tax liability but if the final tax is less than 3% the minimum tax liability remains 3 percent.

It is proposed to treat the same as final discharge of tax liability, the Finance Minister said.

Shaukat Aziz said, to encourage local production of oil, it is proposed that the ghee/cooking oil units may pay minimum tax at the rate of 1% as final discharge of tax liability.

It will encourage local production of edible oil and act as an incentive for the ghee mills to purchase locally produced edible oil.

Sales Tax Goes from Crude Vegetable

The Finance Minister also announced withdrawal of sales tax exemption from cottonseed and crude vegetable oil obtained therefrom.

Exemption of sales tax from cottonseed and its oil not only deprives the public exchequer of its legitimate revenue but also de-links the proper accounting of its consumption in the production of vegetable ghee/cooking oil.

Accordingly, it is proposed to levy sales tax at the rate of 15% on supply of cottonseed, cottonseed oil and oil dirt/sludge, he added.

However, to ensure price stability, the Finance Minister said, it is proposed to zero-rate supply of oil cake so that oil expellers are able to claim required input adjustment without increase in price of this essential item for the livestock and poultry feed industries.

Sales Tax levy on ginned cotton, hides, skins and raw wool Removed

Zero rating of sales tax on ginned cotton, hides and skins and raw wool was also announced.

"As the sales tax collected on ginned cotton, hides and skins and raw wool is adjusted or refunded at subsequent stages of production by the spinning sector, it is proposed to zero-rate supply of ginned cotton," Shaukat Aziz said.

This measure will remove cash flow problems for important export oriented industries to the extent of Rs. 15 billion per annum and expedite payment to ginners and growers of cotton and considerably reduce export-related refunds, he added.

The Finance Minister said, this is a far reaching measure that we have adopted to give a major boost to economic activities in the country.

Importers, steel melters and re-rollers Exempted from Sales Tax audit

Likewise, the Finance Minister announced exemption from routine audit for importers, steel melters and re-rollers.

Shaukat Aziz said, in order to improve revenue collection, an optional incentive-based scheme is being proposed that commercial importers, who make upfront payment of sales tax on minimum 14% value-addition would not be subjected to routine audit of sales tax.

Similarly, a new scheme for improved revenue collection from the steel melters and re-rollers, on basis of value addition is also being proposed.

The proposed measure is likely to result in increased revenue from this sector, remove distortions and reduce the discretionary powers of the auditors as well as allegations of harassment and corruption, he added.

Shaukat announces establishment of 'Pakistan Savings'

Finance Minister Shaukat Aziz here on Saturday announced the establishment of "Pakistan savings" to promote savings and investment in the country.

He said that a number of new initiatives "we are taking to promote savings and investment in the country. First, we are transforming the National Savings Center into a corporation to be known as Pakistan Savings". He added that it will be run on commercial lines.

Presently, he said the NSC is marketing only government securities through a network of some 320 branches.

With significant reduction in return on fixed securities, brought about by the market conditions, small savers are feeling frustrated as they have no access to those securities that offer better return, he remarked.

The Finance Minister said that the new company will diversify its business by offering mutual funds of different kinds, which will be managed by professional assets management companies. Indeed, the company will facilitate access of
individual investors to high yielding securities, which at present are beyond their reach. Depending on investors appetite mutual funds of fixed and variable return securities can be offered.

He said in this way, the company will enable small investors to access the capital market.

Shaukat Aziz said that the company will play an important role in resource mobilization and increasing the availability of domestic resources for investment. It will greatly improve the quality of services as well as cater for broader national coverage than at present, he added.