Economic heartbeat growing, says buoyed Shaukat Tarin
Launches Pakistan Economic Survey: Says GDP showed upward trend: Rules out power tariff increase: Electricity distribution companies to be privatized: IMF wants Rs150b new taxes but we won’t burden poor: Vows to end FBR harassment
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Finance Minister Shaukat Tarin has appreciated the resilience of Pakistan's economy during the ongoing devastating coronavirus pandemic saying though the government had put the GDP growth rate target at a modest 2.1% and the IMF and World Bank even put it lower; however, the economy showed exuberance and exceeded all these estimations.
Finance Minister Tarin was addressing a pre-budget press conference after launching the Pakistan Economic Survey in Islamabad on Thursday.
He said that the government had made tough but far-reaching decisions during Covid-19 pandemic. The government facilitated people during this pandemic, he said adding that exporters were given subsidies on electricity and gas. He said that IMF wanted the government to raise power tariff but Prime Minister Imran Khan was adamant not to increase the electricity price.
He said Prime Minister Khan adopted the smart lockdown policy to save the economy from a total shutdown. He said it was a wise move. Despite this, he said, still 20 million people were rendered jobless during this pandemic. He said if Prime Minister Khan would not take timely action, the third wave of corona pandemic would have far more serious and overwhelming effects on our economy.
He said to deflect the stagnant effects of the Covid-19 curb measures, the prime minister incentivized construction, agriculture, manufacturing and textile sectors. He said the agriculture sector posted a growth of 2.77% against a target of 2.8% despite the fact that the cotton crop did not do well this fiscal.
Mr Tarin said that the Large-Scale Manufacturing Sector (LSMs) saw a growth of 9%. He informed that for the construction sector, the premier got a concession from IMF.
He was of the opinion that the economy had made a jumpstart. He touted the rising bulk of remittances. He said ‘our remittances have exceeded the threshold of $26 million’. He said that it was in fact a Godsend opportunity to keep our economy afloat. He hoped that the remittances would cross $29 billion next fiscal.
He said our remittances rose even higher than our exports, touting that our current account became surplus due to high remittances. ‘The increase in remittances shows that overseas Pakistanis repose trust in PM Khan,’ he added.
He said the State Bank of Pakistan’s forex reserves had also reached $16 billion.
Mr Tarin hoped that Pakistan would get relief from the Financial Action Task Force and soon it would be out of the FATF grey list. He said the FATF companies had indicated the positive report.
He said the Federal Board of Revenue had collected Rs4,173 billion in tax collection which saw a growth of 50%. He said the government would put the FBR tax collection target at Rs5.8 trillion in the next fiscal budget.
The finance minister said in order to control the inflation, the basic infrastructure was needed to be overhauled. He said the inflation rate in May 2021 was recorded at 10.9%.
He said in the international market, the price of sugar raised by 58% and petroleum prices also saw an upward trend. But the government did not raise the prices of these commodities as it did not want to put the burden on the people when the economy is already shrinking during the Covid-19 pandemic, he added.
He said the government gave facilities to the people. He said exporters were given subsidies on electricity and gas.
He lamented that our country which used to export food products had now become an importer of agricultural products. We are importing wheat, lentils, sugar and ghee, he said adding if prices went up in the international market then we would automatically be affected by this.
Mr Tarin said his government tried to save people from the bad effects of Covid-19 on the economy. He said IMF wanted the government to put extra taxes of RS150 billion on people but the PM refused to levy any more taxes.
He said the government and IMF both wanted the same thing: sustainable growth. He said that IMF demanded from us to put more taxes to gain sustainable growth. But the government wanted to raise taxes not by levying more taxes, rather it would bring more people into the tax net and would widen the tax base.
He said the government would privatize the power distribution companies and added that the circular debt would become Rs1.5 trillion in 2023.
He vowed to end the harassment by FBR, saying that the board officials would no longer pester people regarding tax audit. He said people would hire third parties services of their own choice for audit purposes. He said from now on, nobody would receive notices from FBR.
He said for the corona fund, Rs1,240 billion had been set aside adding that Rs510 billion had already been released so far.
He said his government would put emphasis on IT. He said India progressed 100% in the IT sector. He said our government intended to make progress in the IT sector. He wondered if Pakistan would not make 40% progress in the IT sector. “We want 100% growth in the IT sector,” he added.