Open AccessThe Operation of the Export Bonus Scheme in Pakistan's Jute and Cotton Industries
Author(s) -
Qazi Kholiquzzaman Ahmad
Publication year - 1966
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v6i1pp.1-37
Subject(s) - voucher , commodity , rupee , economics , foreign exchange , earnings , commerce , business , agricultural economics , exchange rate , monetary economics , market economy , finance , accounting
The author's intention is essentially to extend the Bruton andBose study of the Pakistan Export Bonus Scheme [1], in terms of bothtime and commodity. However, in this paper we examine the operation ofthe scheme in jute and cotton industries only. In our next paper, whichis now in process, we take up the other industries covered in [1] andalso a few more. Very briefly, the scheme works in the following way1.The exporter of a "bonus commodity" surrenders his foreign exchangeearnings to the State Bank of Pakistan and receives, in addition to therupee equivalent, a voucher that entitles its owner to purchase foreignexchange equal in value to 20 or 30 per cent (depen¬ding on thecommodity exported) of the amount earned. The voucher can be utilisedfor obtaining foreign exchange for use in a) importing a wide range ofgoods, b) business travels and c) opening and maintaining commercialoffices abroad. Vouchers are issued for all goods except raw jute, rawcotton, hides and skins, raw wool and rice. The voucher is freelytransferable, and its price (which is commonly known as the premium) isdetermined by the market. Imports permissible under bonus vouchersinclude a large number of items—both capital and consumer goods.