PML-Q faces split over move for alliance with PPP

ISLAMABAD: A recent meeting between federal Law Minister Babar Awan and Punjab PML-Q chief Chaudhry Pervaiz Elahi has led to speculations of a possible alliance between their parties but this may not be enough to provide a second lease of life to the Q League in the long run.

Background interviews with several PML-Q parliamentarians show that in Punjab the party has been virtually divided into three groups: one group looking for a merger with the PML-N, the second leaning towards the PPP and the third continues to sit on the fence.

But it appears that a majority of the lawmakers will either go for understanding with the ruling PPP or with the opposition PML-N.

The developments in Punjab are going to decide the future of the party nationwide, because out of 49 PML-Q members in the National Assembly 27 are from the province.

“Each one of us has already started charting out our possible future course of action,” a lawmaker said. Claiming that the PML-Q parliamentarians were desperately running around to secure their constituencies in the next elections, a party insider gave the example of Khanewal where his party had three MNAs and all of them were making different political moves because of their own compulsions.

Mohammad Raza Hayat Hiraj from NA-156 dumped the PPP after the 2002 elections to jump onto Gen Pervez Musharraf’s bandwagon.

Having won the 2008 election on a PML-Q ticket, he is at the moment in search of his future political orientation.

And having got the message that the PPP will not welcome members of the PPP (Patriots) such as him who played a critical role during the Musharraf rule (Hiraj was a federal minister), he has been left with no option but to look towards the PML-N.

According to reports, he has met Hussain Nawaz, the elder son of PML-N chief Mian Nawaz Sharif, in London a couple of times.

Pir Aslam Bodla from NA-158 has more choices. Not only is he a veteran PPP member, he also kept a low profile during 2002-08. This is why he can join the PPP.

That the party leadership is going to welcome him is evident from the fact that he has accepted the chairmanship of a NA standing committee without seeking permission from his party chief.

Hamid Yar Hiraj from NA-157 is keeping his options open simply because he can. Not only did he win in 2002 as an independent candidate (he later joined the Q League), he also enjoys links with the PPP because his late father was elected to the Punjab Assembly in the past on the party ticket.

Similar trends can be observed in other parts of the province. For example, Riaz Hussain Pirzada from Bahawalpur is looking towards the PML-N.

And he can do so because one of his nephews, Mian Mohammad Kazim Ali Pirzada, won an election for a provincial seat as an independent candidate and then joined the PML-N on his uncle’s advice. This has kept doors open for Pirzada.

MNA Sardar Bahadur Ahmed Khan Sihar from Bahawalpur has met President Zardari and reportedly garnered an assurance for a party ticket in the next elections.

Khwaja Sheraz Mahmood from Dera Ghazi Khan has also been given the leadership of a standing committee of the National Assembly. This indicates that he will support the party in the future.

On the other hand, Sheikh Waqas Akram from Jhang is eyeing the PML-N in view of its influence in his area.

At the same time, both parties are also deciding about accepting ‘turncoats’ on the basis of political expediency. Consider Raja Jawaid Ikhlas, a former nazim of Rawalpindi, who has recently rejoined the PML-N. This will give a big boost to the party because his son Raja Qasim Jawaid Ikhlas gave a tough fight to PPP’s Raja Ashraf in NA-51.

This, it is noteworthy, is the only seat the PPP won in Rawalpindi city which was otherwise swept by the PML-N.

On this seat, experts felt that the Muslim League votes had been divided which led to the PPP’s win, as Chaudhry Mohammad Riaz of the PML-N had secured 54,000 votes.

Nawaz offers good rule recipe to Zardari

ISLAMABAD: Pakistan Muslim League-N chief Nawaz Sharif has written a letter to President Asif Ali Zardari advising him to address the issues of corruption, inflation, lack of accountability and non-implementation of Supreme Court orders and to take measures to save large state-owned enterprises.

The letter was presented before the National Assembly and handed over to Prime Minister Yousuf Raza Gilani by Leader of Opposition Chaudhry Nisar Ali Khan on Wednesday.

“Prime Minister Gilani in his speech in the National Assembly on Nov 3 had remarked that he would welcome suggestions and recommendations from those who had misgivings about the government’s commitment to good governance. It is in the spirit of his offer that I want to share some of my thoughts with you, as I have done in the past with all sincerity,” Mr Sharif says in the letter.

The issue of accountability and formation of the proposed National Accountability Commission (NAC) is the first matter addressed in the four-page letter.

“Both PML-N and the ruling Pakistan people’s Party (PPP) had agreed to establish an independent accountability forum. Regrettably, more than two and a half years have elapsed, but the Ehtesab Bill has not been enacted till today. PML-N believes that a consensus Ehtesab Bill is an urgent requirement to ensure fair and transparent accountability in the country and must, therefore, be presented during the current session of parliament.”

Mr Sharif said a recent report of the Transparency International painted a dismal picture of how Pakistan was viewed the world over. “This perception will inevitably have a most damaging impact on all dimensions of our relations with the outside world, particularly our efforts to attract foreign investment.

“In his budget speech, the finance minister had admitted that the country was suffering losses of over Rs250 billion through leakages in SOEs. In the past four months, the situation has worsened. Regrettably, no corrective action has been taken so far. PML-N feels that incompetence, corruption and cronyism in the management of the SOEs are the major factors responsible for the huge losses being incurred by these corporations.

“We demand that senior management of all SOEs, including Pakistan International Airlines, Pakistan Steel Mills, Pakistan State Oil, Railways, National Investment Corporation, Trading Corporation of Pakistan and power sector companies, be replaced through a transparent recruitment process with well-reputed and talented Pakistani professionals from home and abroad.”

Referring to the National Reconciliation Ordinance, he said: “Non-compliance of a Supreme Court judgment on the NRO is an attempt to seriously compromise the rule of law and generates tension between the judiciary and the executive. PML-N demands that all judgments of the apex court must be implemented in totality without further delay.”

On inflation and sky rocketing prices of petroleum products and electricity, Mr Sharif
said the need for mobilising more resources was understandable, but “it must be done by preventing losses in the SOEs, leakages in the tax collection process and by better enforcement of the tax regime, rather than by accentuating the suffering of the already distressed citizens.

Moreover, the failure to take any substantive steps to reduce the non-productive expenditures, such as rationalisation of the size of the cabinet, is adding to the common man’s frustration. PML-N demands that the increases in POL prices be withdrawn immediately as they are causing great hardship to people. Further, the coalition government must reduce the size of the cabinet forthwith. We also propose a comprehensive and thorough debate in parliament on measures to encourage savings by cutting wasteful expenditure.”

The former prime minister said that despite repeated written requests by the Punjab government to make timely imports of sugar to avoid escalation in the prices, the federal government had miserably failed to take appropriate steps. “PML-N demands that a parliamentary committee be formed to investigate the matter for taking action against those who failed to ensure timely import of sugar.”

Taxpayers to pay surcharge; govt clears RGST

ISLAMABAD: Facing possibly the toughest moment in the court of people, the PPP-led coalition government approved on Wednesday what is being described here as a ‘mini-budget’ which includes some politically risky taxation measures of over Rs65 billion.

These will be taken to parliament for approval by the government in a bid to share the political burden and also backlash.

The measures, to be implemented from January next year, were approved by a meeting of the cabinet presided over by Prime Minister Yousuf Raza Gilani.

These include imposition of a 10 per cent flood surcharge on income tax paid by individuals for a period of six months and an increase in the special excise duty on luxury items from one per cent to two per cent. These measures are estimated to yield over Rs40 billion.

The cabinet also approved a draft of the reformed general sales tax (RGST) bill.

“Taxpayers over the exemption threshold of Rs300,000 who pay income tax will be subjected to the flood surcharge,” Finance Minister Dr Abdul Hafeez Sheikh said at a press conference also addressed by Information Minister Qamar Zaman Kaira and Interior Minister Rehman Malik.

Dr Sheikh, however, did not mention that the flood surcharge would also be imposed on withholding tax paid by various businesses which, economic experts believe, will pass it on to end-consumers.

What the government did not announce is that the RGST bill also proposes withdrawal of tax exemptions on agriculture and textile sectors.

The government decided to continue GST exemptions on food items. The rate of GST on sugar will be revised to 15 per cent from the current eight per cent.

The tax on telecommunication will come down to 15 per cent from the existing 19.5 per cent.

When asked why had the government failed to impose tax on agricultural income, Dr Sheikh said: “Personally speaking, I am in favour of taxing the rich, but the Constitution does not allow the federal government to do so because it is a provincial subject”.

He said the RGST draft had been prepared in consultation with the provinces as under the Constitution collection of tax on services was a provincial jurisdiction and the federal government, if asked by all or any province to collect the tax, would return the entire money so earned to the respective province.

“We are expecting that the current session of parliament will approve the bill before the end of the current year,” the finance minister said, adding that these revenue measures would be finalised after approval by parliament.

“Parliament will also give final nod to the RGST bill seeking withdrawal of exemptions and introduction of a singular rate,” he added.

Dr Sheikh said that about Rs10 billion would be generated from an increase in special excise duty on luxury items like cosmetics, cigarettes, soft drinks, etc, Rs27-31 billion from the 10 per cent flood surcharge and Rs25 billion from withdrawal of GST exemptions on goods and services.

The proposed bill seeks a reduction in the GST rate to 15 per cent from 17 per cent, doing away with multiple rates, increasing the retailers’ exemption threshold from Rs5 million to Rs7.5 millions and expanding the narrow tax base.

Powerful lobbies which enjoyed exemptions would now have to pay their share of taxes, the finance minister said. Justifying the imposition of taxes, he said the government needed Rs250-275 billion for rehabilitation of over two million flood-affected people — Rs160 billion for cash assistance to the flood-affected families, Rs7 billion for farmers in the form of free seeds and fertilisers and Rs3 billion subsidised credit to the affected people.

As per donors’ estimates, Dr Sheikh said, the government also needed $3 billion over a period of three years for rehabilitation of federal and provincial infrastructures affected by the floods.

A senior FBR official was of the view that the revenue measures would increase tax-to-GDP ratio to 12 per cent from the current nine per cent. But, he said, this estimate depended on 100 per cent compliance level as against the current 30 to 40 per cent.

During the cabinet meeting, ministers belonging to the Muttahida Qaumi Movement strongly opposed the decision to enforce RGST and flood surcharge.

Talking to reporters, Dr Farooq Sattar, deputy convener of the party and Minister for Overseas Pakistanis, said: “The new taxation measures are going to open floodgates of a tsunami of price hike.”

He said the MQM had not been taken into confidence by the government and “we will continue to oppose the move both in parliament and outside”.

Economic experts criticised the taxation measures. “This is a mini-budget which will lead to price hike and fuel inflation across the board,” former finance minister Salman Shah said.

He said that instead of curtailing its rising expenditures, the government was financing these through additional revenue measures.

Former chief economist Dr Pervez Tahir suggested that instead of imposing the flood surcharge across the board, the government should have limited it to higher income groups.

LG election split resolved: Ibad

KARACHI: Sindh Governor Dr Ishratul Ibad has said that differences between the Pakistan People’s Party and the Muttahida Qaumi Movement over the local government system have been resolved and a draft law on the subject would soon be finalised.

Describing 2011 as the year for local government elections, the governor said that the delay in holding elections of the local government was caused by preparations for the 18th amendment in the constitution, followed by the flood situation. But, he added, both parties were now prepared for the local government elections.

He was speaking to a group of media persons at the Governor’s House on Wednesday after reviewing a plan for a housing project where flood-affected people would have clean drinking water facilities through solar energy.

In reply to a question, he said he had given his consent to the two bills — titled Shaheed Benazir Bhutto University Shaheed Benazirabad Bill, 2009, and People’s University of Health and Medical Sciences (women) Shaheed Benazirabad Bill 2009 — which had been sent back to the assembly with his message.

Earlier, the governor told the participants of a meeting that the rehabilitation stage was certainly long and difficult and the government was striving to provide the flood-affected people every facility within its resources. He said priority was being given to the IDPs’ return and clean drinking water supply projects.

He said that floodwater was still standing in many areas, causing a delay in return of IDPs.

FIA to conduct sugar raids; hoarders given two days

ISLAMABAD: With sugar prices skyrocketing and hitting Rs110 to Rs125 per kilogram, a showdown appears to be in the offing between the Punjab government and the federal government after the federal cabinet decided on Wednesday to use intelligence network to trace sugar hoarders and confiscate their stocks.

In what the PML-N termed a political stunt, the cabinet authorised Interior Minister Rehman Malik on Wednesday to act against sugar hoarders and force them to release their stocks in the market to bring the price down.

The minister has asked hoarders manipulating prices to declare their stocks in two days and warned them of stern action if they did not do so.

“You will be in deep trouble when my boys come after you,” Mr Malik told hoarders. He offered a hefty reward of 10 per cent of confiscated stocks to people providing information about the concealed stocks.

Though Mr Malik did not announce how his ministry would trace the hoarded sugar, an official of the interior ministry said that the Federal Intelligence Agency would be used for the purpose.

“Raids would be conducted by taking local police into confidence and in close coordination with relevant provincial authorities,” the official said.

He, however, pointed out that this could be seen as “interference” in the jurisdiction of provinces.

The federal government says that sugar mills have 200,000 tons of sugar and wholesalers and retailers have stocks of 170,000 tons.

The government took action in 2008 against owners of sugar mills and wholesalers, but the action was taken only against the mills owned by political families outside the PPP fold.

Talking to Dawn PML-N spokesman Ahsan Iqbal claimed that the entire game was to politicise the issue and blame the Punjab government for the crisis.

“They will try to prove this point by showing some success in Punjab, but the fact is that the federal government is hiding the fact that the country is facing sugar shortage and the government has not imported it in time,” Mr Iqbal said.

“It is often said by PPP leaders that the Punjab government has failed to control sugar prices, I have asked PPP leaders to say what is the price of sugar in Sukkur?”

The PML-N leader asserted that raids and confiscation of stocks would only disturb the supply channel and market mechanism.

Even wholesalers and the millers were up in arms against the government decision to use intelligence network to confiscate stocks.

He termed it a political stunt and said that prices were moving upwards mainly because of the failure of the policies of the federal government.

According to wholesalers, raids at a time of shortage, would only scare the business community. They said the largest sugar stocks were still held by the Trading Corporation of Pakistan.

“The federal government should first conduct a raid on the TCP,” said Anis Majeed, Chairman of the Karachi Wholesale Grocers Group, adding: “The government will lose all claims before the court because before any raid the policy has to be made clear.”

They said that earlier actions and decisions by government functionaries and the judiciary had only led to disappearance of sugar from the market and further increase in the price.

No rush against anti-India militants, says Musharraf

WASHINGTON: Former president Pervez Musharraf called Wednesday for a more gradual approach against militants such as Lashkar-e-Taiba, saying they enjoyed sympathy for fighting India.

The United States and India have urged Pakistan to step up pressure against movements such as Lashkar-e-Taiba which is blamed for planning the bloody siege of Mumbai that killed 166 people two years ago.

“You can’t rock the boat so much that the boat capsizes,” Musharraf said at the Atlantic Council think-tank in Washington.

“While these things have to be done, allow piecemeal, gradual action through a well thought-out strategy which does not disturb the entire law and order situation in Pakistan,” Musharraf said.

Musharraf acknowledged that Lashkar-e-Taiba and like-minded groups such as Jaish-e-Mohammad were “involved in terrorism in Pakistan” but said they have been “very popular” for fighting Indian rule in divided Kashmir.

“Since they were going to Kashmir and fighting the Indian army, it went along with the psyche of the people of Pakistan — with everyone,” Musharraf said.

Musharraf said the Jamaat-ud-Dawa, a wing of Lashkar-e-Taiba, “did an excellent job” in relief operations following major floods this year and “the best work” in the wake of the 2005 earthquake on the Pakistani side of Kashmir.

“It’s a difficult situation for any government in Pakistan. So the root is (to) resolve the Kashmir dispute, frankly,” Musharraf said.

Musharraf renewed criticism of President Barack Obama for not raising Kashmir during his recent visit to India and for not stopping in Pakistan, the frontline US partner in the war in Afghanistan.

Musharraf banned Lashkar-e-Taiba and Jaish-e-Mohammad in 2002 after they were accused of storming the Indian parliament. But many experts say the ban has been half-hearted, with Pakistan believing the groups serve its strategic purpose.