Ministry of Commerce fails to avail Rs6b budget for first year

Utilised only Rs1b, remaining amount unlikely to be released by the SBP

ISLAMABAD: The Ministry of Commerce has failed to avail the Rs6 billion allocation for the implementation of the Strategic Trade Policy Framework (STPF) 2015-18 except the funds of Rs1 billion on account of duty drawback of ‘local taxes’ claims of the exporters.

According to a source in the ministry, the federal government had allocated Rs6 billion in the first year for the implementation of the STPF out of the total Rs20 billion proposed allocation for the three-year policy.



However, the State Bank of Pakistan (SBP) released only Rs1 billion during the entire year on account of duty drawback of local taxes to refund to the exporters and the remaining amount is unlikely to be received by the ministry at least during the current fiscal year.

“The ministry did not seek the allocated funds from the finance division to avoid their possible lapse due to limited time as the STPF was approved only two months before the end of the current fiscal year,” said the officer.

“There was no use of seeking funds on account of the trade policy because the fiscal year is almost over and funds could not be spent in the right manner,” he noted.

The government took almost nine months for the framing and approval of the policy and later took one month in the issuance of import and export orders.

The import and export policies are the guidelines of the framework under which the traders have to avail the relief for exporting their products. Moreover, the officer was also unsure whether the ministry would be able to utilise entire budget of Rs20 billion over the next two years as it failed to achieve the first year’s target.

Under the policy, government has set an export target of $35 billion by 2018 from the current $23 billion and the experts have termed it  ‘ambitious’ keeping in view the previous performance of the government in achieving targets.



Despite all its claims, the government failed to enhance exports during its three years tenure and the exports dwindled despite getting a GSP Plus status from the European Union (EU).

Among other the reasons for the decline in exports are lack of value addition, standard packing and innovation, absence of diversification in the products.

Moreover, bureaucratic bottlenecks, absence of FTAs with many potential countries and dismal performance of trade attachés are other reasons attributed to low exports of the country.

Published in The Express Tribune, May 10^th, 2016.

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