Pak system neither presidential nor parliamentary: PM

ISLAMABAD: Prime Minister Syed Yousuf Raza Gilani Sunday said the prevalent system in the country is hotchpotch of systems, terming it neither parliamentary nor presidential, in response to a query by a student.Addressing the ceremony of convocation of International Islamic University, he said the constitutional reforms are being effected in the constitution, vowing to restore the 1973 constitution after introducing proper amendments in it.‘We believe in democracy and there is no restriction on media in the country,’ he added saying the government will not slap any constraint on media.“We believe in freedom and democracy.”He said if all the institutions function properly, there could not be any clash.‘It is only Education with which the problems facing the nation could be braved.’The real reason behind extremism and terrorism is lack of education, Gilani said adding the extremists are working on foreign agenda and foreign powers are employing them for their ulterior motives.The PM Gilani said the stable Afghanistan is in the interest of Pakistan; therefore, we will make efforts for stability there.

SC verdict: govt in daze to fill Rs122bn gap

ISLAMABAD: The Supreme Court’s interim order to suspend the imposition of carbon surcharge on petroleum products has put the IMF programme of $7.6 billion loan at stake because the government will have to find ways and means to fill the revenue gap of Rs122 billion during the fiscal year 2009-10. Not filling this gap would mean increasing fiscal deficit by almost 0.8 per cent of the GDP, jacking it up to 5.7% from the existing target of 4.9%, which the IMF will not allow at any cost.“It is not possible to stick to the budgetary measures for fiscal 2009-10 if carbon surcharge is not to be collected. So all budgetary targets will have to be revised,” a senior official of the finance ministry said while talking to The News on phone from abroad soon after the announcement of interim order issued by the Supreme Court on Tuesday.When contacted for comments, Minister of State for Finance and Economic Affairs, Hina Rabbani Khar said that obviously the government could not raise question on the order announced by the Supreme Court but at the same time opined that it was an interim order.She admitted that it would put the government in a difficult situation because there are few alternatives to fill this huge gap of Rs122 billion. The options are limited to cutting down on the Public Sector Development Programme (PSDP) or printing more notes, which will be inflationary, she added. Acting Secretary Finance Ayub Tarin along with OGRA high-ups will submit the government viewpoint before the apex court tomorrow (Thursday), she added. She said the expenditures for running the government increased by 3 percent in the budget 2009-10 compared to revised estimates for 2008-09.Defending the imposition of carbon surcharge, she said that the government introduced transparent mechanism and the prices of POL products might have come down next month keeping in view the declining trend in international market. Another finance ministry official was of the view that the IMF considers the fiscal deficit target as sacrosanct and any deviation from the set target might put the whole programme in jeopardy. The $7.6 billion IMF programme has envisaged 4.9 per cent fiscal deficit target for 2009-10 and the suspension of carbon surcharge will create a huge gap of Rs122 billion, which will not be possible to fill either by reducing expenditures or increasing revenues. During the budget-making exercise, the finance ministry officials has expressed apprehensions that the Supreme Court might even block the Petroleum Development Levy (PDL) because the government continued to charge this amount from the masses on the basis of an ordinance promulgated in 1961. “The double taxation such as sales tax as well as PDL was considered the most difficult issue to be defended before the Supreme Court,” said an official. He said the government by imposing fixed carbon surcharge tried to achieve two objectives: to ensure uninterrupted stream of revenue and to achieve parliament’s support. It was the view of the budget-makers that with carbon surcharge becoming part of the budget, the Supreme Court would not block the way of the government to generate Rs122 billion in the fiscal year 2009-10.

suspends carbon surcharge

ISLAMABAD: The government was made to fret over the fiscal impact while the masses went into a celebratory mode hoping for a permanent relief when the Supreme Court in its interim order on Tuesday suspended the imposition of carbon tax on petroleum products and directed the Oil and Gas Regulatory Authority (Ogra) to issue a notification by Wednesday, suspending the tax till the final decision on the petitions. As a result, petrol and diesel prices are expected to come down by Rs10 and Rs8 per litre, respectively. Kerosene oil will become cheaper by Rs6 per litre. A three-member, bench of the Supreme Court comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Chaudhry Ijaz Ahmed and Justice Shahid Mahmood Akhtar Siddiqui, is hearing the petitions filed by PML-N Secretary General Iqbal Zafar Jhagra and Senator Rukhsana Zuberi of the Pakistan People’s Party, challenging the recent hike in the prices of petroleum products.The court ordered cancellation of the notification issued on June 30 regarding the imposition of carbon tax and directed the Ogra to stop charging the tax until the court concludes hearing. The court also directed the secretary, ministry of environment, to appear before the court on July 9 along with the summary, if any, forwarded to the government demanding funds for projects aimed at provision of pollution-free environment for which the government had to impose carbon surcharge. The apex court directed Ogra to issue a notification suspending the carbon tax on petroleum products, which must be applicable from today, July 8. Advocate Muhammad Ikram Chaudhry, counsel for PML-N Secretary General Iqbal Zafar Jhagra, Khwaja Saeed Zafar, counsel for Ogra, Attorney General Latif Khosa, the secretary petroleum and representatives of Ogra and Senator Rukhsana Zuberi, one of the petitioners, appeared before the court in person. Muhammad Ikram Chaudhry advocate submitted that a barrel of crude oil produces 35 litres of diesel and 27.5 litres of petrol. “Assuming that the price of crude oil is US$70 per barrel on the international market, the government roughly earns a profit of Rs1050 from only these two extracts of crude oil”, he contended.He further submitted that the government had produced no documents to show that the imposition of carbon surcharge was necessary. The learned counsel argued that the government was charging sales tax on every component of petroleum products, which, he said, was against the provisions of the Constitution.Counsel for Ogra Khawaja Saeed submitted that the government had replaced petroleum development levy with carbon surcharge and that increase in the prices of petroleum products was due to their increasing prices on international markets.The court directed counsel for Ogra to provide in writing the break-up of the components of the prices of petrol, diesel and kerosene oil, as on June 30 and July 1. According to the break-up provided by Ogra, price of petrol on June 30 stood at Rs56.21 per litre including ex-refinery price of Rs31.91, petroleum development levy (PDL) Rs10.54, sales tax Rs7.75, oil marketing companies’ margin Rs1.39, dealers’ margin Rs1.74 and inland freight Rs2.38.On July 1, it was raised to Rs62.13 per litre including ex-refinery price of Rs36.59, carbon surcharge Rs10, sales tax Rs8.57, oil marketing companies’ margin Rs1.60, dealers’ margin Rs2.00 and inland freight Rs3.37, Khawaja Saeed submitted.Similarly, per litre price of diesel on June 30 was Rs55.71 including ex-refinery price of Rs34.78, PDL Rs8.53, sales tax Rs7.68, oil marketing companies’ margin Rs1.35, dealers’ margin Rs1.50 and inland freight Rs2.22, while on July 1, the product was sold at Rs62.65 including the ex-refinery price of Rs40.94, carbon surcharge Rs8, sales tax Rs8.64, oil marketing companies’ margin Rs1.35 dealers’ margin Rs1.50 and inland freight Rs2.22, counsel for Ogra said. He further stated that price of kerosene oil per litre stood at Rs51.87 on June 30 including ex-refinery price of Rs32.77, PDL Rs6.88, sales tax Rs7.15, oil marketing companies’ margin Rs1.74, inland freight Rs3.61 while dealers were given no margin. On July 1, the price of the product was hiked to Rs59.35 including the ex-refinery price Rs39.26, carbon surcharge Rs6, sales tax Rs8.19, oil marketing companies’ margin Rs1.72 and inland freight Rs4.16.The Supreme Court observed that the statement showed that in fact ex-refinery prices and sales tax ratio had been increased on petroleum products. Attorney General Sardar Latif Khosa submitted that the government had to increase the prices due to increase in the prices of petroleum products on international markets and for running the affairs of the country in the wake of budget deficit.The court, however, wanted to know the reason behind the imposition of carbon surcharge. “Has the ministry of environment forwarded any summary demanding funds for projects for the improvement of environment for which the government was compelled to impose carbon surcharge?” Justice Mehmood Akhtar Siddiqui enquired. “Where from the proposal for the imposition of carbon surcharge came?” the court asked.The attorney general informed the court that the cabinet had taken the decision in the financial bill for the year 2009-10.The court, however, observed that it was of the opinion that there was no immediate need for the imposition of carbon surcharge instead of the petroleum development levy. The court observed that it was necessary to examine whether the ministry of environment had demanded any amount for provision of pollution-free environment.Earlier at the start of the hearing of the case, the chief justice opened the envelope in the court containing report submitted by the commission headed by Justice (retd) Bhagwandas regarding the price mechanism of petroleum prices. The chief justice directed the parties to get copies of the said report from the registrar of the apex court and the court would take it up on July 9 during the hearing of the case.

Congress sends $106 billion war-spending bill to Obama

WASHINGTON ( 2009-06-19 09:55:26 ) :US lawmakers late Thursday sent President Barack Obama a 106-billion-dollar emergency bill to fund the wars in Iraq and Afghanistan, fight swine flu, aid Pakistan and boost IMF loans to poor nations.
The Senate voted 91-5 for compromise legislation that cleared the House of Representatives by a 226-202 margin on Tuesday.
The measure will fund US efforts in both conflicts until fiscal year 2010 begins on October 1, at a time when Obama has charted a course for withdrawal from Iraq and an escalation in Afghanistan.
The new president has vowed to end the practice of using emergency spending bills to pay for the wars in Iraq and Afghanistan and instead fund US efforts there in the regular yearly appropriations process.
Among other budget items, the measure provides 79.9 billion dollars for Iraq and Afghanistan, as well as 7.7 billion dollars to combat the A(H1N1) flu virus.
The bill also includes eight billion dollars for the International Monetary Fund and a 100-billion-dollar US line of credit for the IMF to help developing countries combat the impact of the global recession.
And it comprises 400 million dollars to help build up the Pakistani security forces' ability to wage counterinsurgency warfare at a time when US lawmakers worry about the nuclear-armed ally's stability.
The measure includes one billion dollars to foster economic development and democratic governance in Afghanistan and 433 million for US diplomatic operations and facilities there.
For Pakistan, the bill includes 707 million dollars for boosting agriculture and food security, assist displaced residents, boost democratic governance, and improve education.
Another 900 million dollars would go to building a new secure US embassy and consulates in Pakistan, and 700 million more dollars for counterinsurgency funding starting September 30.
For Iraq, the bill includes 472 million dollars to continue stabilization programs, and strengthen governance and rule of law; and 486 million for diplomatic operations.
The legislation also calls on Obama to submit periodic reports detailing the progress achieved by his new strategy for Afghanistan and Pakistan.
The bill does not include the 80 million dollars Obama had sought to close the Guantanamo Bay detention facility for suspected terrorists.
The measure includes 660 million dollars in economic, humanitarian and security assistance for the West Bank and Gaza; 300 million dollars for Jordan, 310 million for Egypt, and 69 million dollars for Lebanon.
It includes 555 million dollars of Obama's 2.775 billion dollar request for security aid to Israel.
The bill provides one billion dollars for the so-called "cash for clunkers" program to stimulate the struggling auto industry, paying car buyers cash if they trade in their old gas-guzzling cars for newer more fuel-efficient models.

Carbon tax on CNG withdrawn

ISLAMABAD, June 19: Bowing to intense opposition, both within and outside parliament, to the recently-announced carbon tax on petroleum products, Prime Minister Gilani announced on Thursday that the black tax would not be imposed on CNG.

The prime minister made this highly popular announcement while speaking in the ongoing budget session of the National Assembly. “I have directed the Finance Ministry to withdraw the carbon tax on CNG worth Rs 12 billion and also directed a review of the overall proposed carbon tax and come up with a transparent mechanism,” he said.

The proposed carbon tax has been castigated both by the opposition and the treasury back-benchers with the Leader of the Opposition, Chaudhry Nisar, terming it a “Jagga tax” the other day. Similar harsh reactions were also witnessed in the Senate.

Senator Mian Raza Rabbani, while taking part in the budget discussion in the Senate, had also proposed abolishing the carbon tax on CNG at least. In his policy statement in the National Assembly, Gilani said CNG was being produced locally, was environment-friendly and being heavily used by the lower middle-class, which could not bear more taxation and, therefore, the surcharge on it was being withdrawn. One wonders if this logic was too complicated for his finance adviser and his team to understand in the first place.

He said though withdrawing this surcharge would cause a loss of Rs 12 billion to the government, he had directed the Finance Ministry to review the overall carbon surcharge and come up with suggestions for atransparent mechanism for its imposition so that sufferings of the people could be reduced.

APP adds: Adviser to the Prime Minister on Finance Shaukat Tareen has said the government was ready to review all taxes, as it did not want to burden the people. Talking to Geo News, he said 20 paisa tax had been imposed on each short massaging service (SMS) with the consent of mobile operators. Twenty paisa is so meagre that it would not make any difference, he said, adding as many as 50 billion SMS are sent annually. The carbon tax was not a new tax but only a replacement of the Petroleum Development Levy (PDL).

Zardari avoids Sharm El Sheikh meeting with Singh

ISLAMABAD, June 19: President Asif Ali Zardari has dropped his plan to attend the 15th Non-Aligned Movement summit in Egyptian resort of Sharm El Sheikh where, according to an announcement, he was to meet Indian Prime Minister Manmohan Singh. The Pakistan delegation to the summit will now be led by Prime Minister Syed Yousuf Raza Gilani. ‘Our prime minister will be attending the NAM summit,’ Foreign Office spokesman Abdul Basit said.

The plan was changed after the Yekaterinburg meeting between President Zardari and Prime Minister Singh on the sidelines of the Shanghai Cooperation Organisation (SCO) summit which, according to diplomatic sources, became ‘unpleasant’ at the outset because of Mr Singh’s ‘rude’ remarks.

Before the start of the ice-breaking meeting, the Indian premier bluntly told President Zardari in presence of reporters that his mandate was limited to telling Pakistan that it should not allow its soil to be used for terrorism against India.

The remark irked President Zardari who immediately asked the media to be escorted out of the conference room. In a press statement issued after the meeting, President Zardari’s office had announced that the two leaders would get together again in Sharm El Sheikh.

Foreign Minister Shah Mehmood Qureshi had also confirmed the Sharm El Sheikh meeting between the two leaders. Sources here claimed that the president had decided to skip the Sharm El Sheikh trip to avoid another encounter with Mr Singh.

The FO spokesman played down Mr Zardari’s decision not to attend the summit and said: ‘It was agreed that there will be another meeting of the political leadership of the two countries during NAM summit.’

The FO spokesman said Pakistan was satisfied with the outcome of the Yekaterinburg meeting between President Zardari and Prime Minister Singh and it had never expected the interaction to lead to immediate resumption of composite dialogue between the two countries.

‘From our perspective, the SCO summit in Russia provided a good opportunity for Pakistan and India to break the ice,’ he said at his briefing on Thursday, adding that Pakistan had gone to the meeting with all sincerity and seriousness.

Pakistan now appears to be pinning hopes on the secretaries’ level talks and wants them to be ‘result oriented’. ‘We are looking forward to a productive meeting between the foreign secretaries. Normal relations between our two countries, free of disputes and conflict and embedded in the principles of non-interference, equality and mutual respect, are indispensable for peace, security and prosperity in our region,’ said Mr Basit.

APP adds: The spokesman said Pakistan had suffered the most because of extremism and terrorism, adding that there had been 22 terrorist attacks in various parts of the country over the past one year, claiming 300 lives.

Answering a question about shifting of troops, the spokesman said: ‘It is incorrect that troops have been withdrawing from the eastern border for deployment on the western border.’

Clinton asks India to back Pakistan’s efforts to combat terror

WASHINGTON, June 19: Two days after Prime Minister Manmohan Singh talked tough with Pakistan President Asif Ali Zardari, US Secretary of State Hillary Clinton hoped that India and the US will both support Pakistan’s efforts as it works to take on terrorists in its own country.

The US, she told the US-India Business Council’s (USIBC) Synergies Summit here Wednesday, also welcomed a dialogue between India and Pakistan, but it was for the two countries to decide the pace, scope and character of the dialogue.

"Of course, we believe that India and Pakistan actually face a number of common challenges, and we welcome a dialogue between them," Clinton said. "As we have said before, the pace, scope and character of that dialogue is something that Indian and Pakistani leaders will decide on their own terms and in their own time."

"But as Pakistan now works to take on the challenge of terrorists in its own country, I am confident that India as well as the United States will support those efforts," she said.

Clinton said India and the US "have a common interest in creating a stable, peaceful Afghanistan, where India is already providing $1.2 billion in assistance to facilitate reconstruction efforts.

"United States is committed to the task ahead in Afghanistan, and I hope India will continue its efforts there as well," she said.

India already is a major player on the world stage, Clinton said "and we will look to cooperate with New Delhi as it shoulders the responsibilities that accompany its new position of global leadership."

Manmohan Singh and Zardari met Tuesday on the sidelines of a regional summit in the Russian city of Yekaterinburg during which the Indian leader bluntly said that Islamabad should demonstrate concrete steps to rein in anti-Indian terrorists before their conciliation talks can resume.