The draft bill, to be presented in parliament for approval, is aimed at curbing terrorism and giving special powers to security forces, especially the paramilitary Pakistan Rangers.
According to the proposed amendments, "massive powers" are to be given to the Rangers to deal with law and order. The Rangers will have powers to shoot target killers and extortionists on the spot, state-run Radio Pakistan reported.
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They will have also powers to shoot down criminals involved in kidnapping for ransom and people affecting law and order or destroying national assets.
The bill said these powers are being suggested for the Rangers to ensure the protection of the residents of Karachi, which has been rocked by political and ethnic violence in recent years.
The bill also includes measures to protect witnesses and prosecutors in terrorism cases. It calls for terrorists to be held accountable at all costs.
Federal Minister Zahid Hamid presented the bill in a meeting of the cabinet chaired by Prime Minister Nawaz Sharif.
Sharif said the bill should be referred to the Interior and Law Ministers for a review before it is presented in parliament. He said the proposed changes should be in line with the aspirations and interests of the people.