Finance Minister Senator Ishaq Dar has said that the fiscal deficit has been brought down to 8%, foreign exchange reserves would be taken to $16 billion by the end of 2014 and power generation would go up to 36,000MW by the end of the tenure of the PML-N government. Giving a comprehensive briefing about the state of economy to the Cabinet meeting and TV anchorpersons here on Wednesday, the finance minister rejected the impression in the media that the government retired the circular debt by printing new notes. He said the circular debt of Rs480 billion was paid in 45 days of coming into power of the government through Rs135 billion savings of the government expenditure, Rs138 billion by recoveries from state institutions , Rs59 billion from federal consolidated fund, Rs20 billion from dividend collection and Rs28 billion from investment bonds. He said as a result, 1700MW electricity was added to the system and resultantly the large scale manufacturing increased by 6.8 percent in the first quarter of the current financial year as compared to0.4% in the corresponding period of last year. It revived industries and created new jobs. He said had the government not retired the circular debt, it was duty bound to pay 14% interest for non payment amounting to Rs67.2 billion annually. By clearing the circular debt the government made such a massive saving. He said the present load shedding is due to closure of canal and after two months, the government would be back to normal supply of electricity. The finance minister said the government would be releasing Rs30 billion as electricity subsidy bringing the total to Rs131 billion during the current financial year against the total allocation of Rs220 billion . He said the real problem is recovery of dues and the government is planning to privatize DISCOs and one option is to handover them to provinces at book value. Clarifying the misperception that the government printed more new notes, Ishaq Dar said a total of Rs672 billion new notes were printed against surrender of Rs466 billion old notes and the net note issued were thus only Rs206 billion from Ist July to 30th November, 2013 . He said this currency increase is exactly the same as during the PPP government in the preceding year during the same period of time. Ishaq Dar said the price hike is a matter of great concern for the government and the major factors behind it were increase in oil prices, revenue shortfall and profiteers and hoarders. He said the real culprits are the provincial governments who have not been able to check the tendency of hoarding and profiteering by vested interests. He said they plan to strengthen the magistracy system to nab those indulging in profiteering. He made it clear that there was no problem in supply system. Regarding foreign exchange reserves, the finance minister said that when the PML-N government took over the reserves were $11.4 billion which are now $8.4 billion . He said the government entered into IMF agreement to save the country from going bankrupt. He said the government got $1.1 billion and repaid $ 5.1 billion dollars to the IMF and others hence it repaid more than what it got. He said during the last two and a half years external inflows had gone down to zero. Now the government has reengaged the World Bank , Asian Development Bank , Islamic Development Bank and other financial institutions and our credit rating is stable. He said the government intends to take the reserves to 16 billion dollars by December, 2014 and gave details of the commitments made by WB , ADB , Islamic Development Bank and others in this connection. He said the GSP Plus status by the EU would help in increasing exports to the range of $1.5 to $2 billion .
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