Export development fund (2014)

Export Development Fund (EDF) was formally established through an Act namely ‘Export Development Fund Act 1999’ with the purpose to strengthen and develop infrastructure for promotion of exports through Export Development Surcharge (EDS). In 2005 an amendment came, which provides that Federal Government is required to collect 0.25 per cent of export receipts and transfer to EDF maintained by Ministry of Commerce in the following year. During 2012-13, the Finance Division released an amount of Rs. 452.619 million, equivalent to only 30 per cent of EDS collected. The total short provision since amendment in the Act in 2005 i.e., from 2006-07 to 2013-14, has accumulated to approximately 19 billion rupees.

 The key problems include short provisioning of funds, lack of selection criteria, and absence of monitoring and evaluation system. These prevailing deficiencies allow misallocation and misappropriation of funds towards the projects which fail to boost exports. This paper recommends that the ownership of the fund administration should be vested with the private sector to make them accountable for the judicious use of their money by arguing for an amendment in the Act. The paper proposes creation of a new non-profit company and outlines its mandate and objectives.