Miftah Ismail proclaims pressure on rupee to dissipate in two weeks

Lashes out at previous PTI govt for bringing country to the verge of default: Confesses govt presented tough budget: Says was more concerned to save country from default than to control inflation: Demands early announcement of ECP verdict in foreign funding case

By: News Desk
Published: 03:56 PM, 31 Jul, 2022
Miftah Ismail proclaims pressure on rupee to dissipate in two weeks
Caption: TV grab.
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Finance Minister Miftah Ismail has lashed out at former prime minister Imran Khan whom he held responsible for the economic ills of the country saying that the PTI government left the country on the verge of default while lying emphasis on paying taxes in order to save the country, reported 24NewsHD TV channel.

Addressing a presser in Islamabad, Mr Ismail sounded hopeful believing that pressure on the rupee would be dissipated within two weeks and things would become easy. He said that the government didn’t do anything which could have resulted in the depreciation of the rupee. On the other hand, the rupee value is improving after a reduction in our import bill which is a welcoming sign, he added.

The government in May put a ban on the import of luxury items which has been lifted only yesterday. 

He stated that this month and the previous month, the government had to make payments worth billions which had caused the local currency to come under pressure.

However, he added that the pressure on the rupee would end by next month, promising to rein in the current account deficit.

The minister said that he would endeavour to ensure that the dollars coming into the country on a daily basis would be more than those leaving.

“But to be honest, no one knows the market. I can believe the fundamentals are in my favour but speculation, sentiments also play a role,” he added.

The finance minister said that Imran Khan had brought the country to the verge of default and the current coalition government saved Pakistan from insolvency. He wondered now Imran asked who was responsible. “You (Imran) are responsible”, he said adding that due to wrong policies of the previous PTI regime, our trade deficit was increased.  

Mr Ismail claimed that less revenue was collected during the PTI era. “In four years, the PTI could not reach the tax-GDP ratio of the PML-N government. We had left it at 11.1pc and the PTI took it to 9pc. Khan Sahib used to say he would increase tax [collection] but he reduced it every year.”

When you are reducing tax collection every year and increasing your budget deficit, then you will be in debt, he pointed out.

The minister said when Imran backed out on his promise with the IMF then our current account deficit ballooned. We presented a difficult budget but it was not our fault as Imran had left the economy in tatters, the minister rued. 

He also blamed the PTI government for the increase in circular debt, saying that it had gone from $1.1bn to $2.5bn during its tenure. The minister said that the PTI chief did not increase the power tariff for 1.5 years, which is why consumers were not receiving bills with fuel adjustment charges for April.

“If electricity consumers have to pay the April fuel adjustment charges, then why we should be blamed for this,” Ismail wondered. 

He said the previous government increased circular debt by Rs1400 billion. He held the previous government responsible for the downfall of every sector. He said Imran caused huge loss to the national kitty to provide petrol and diesel at subsidized rates. 

“Imran committed a gross mistake same as Sri Lanka by selling petrol at cheap rates. Imran tried to trap us by providing cheap gas and electricity,” Ismail maintained. 

He castigated Imran for increasing Pakistan's debt by 80% in his four-year tenure. The former prime minister gave amnesty to his cronies and after taking a U-Turn gave subsidy to his own people, he alleged.  

The finance minister said that everyone should pay tax to save this country. “I have slapped tax on my own factories and on prime minister’s children as well,” he added. 

He announced tax relief on electricity bills of those shopkeepers who consume less than 150 units. He said that small retailers who are earning Rs1.2 million annually, they would have to pay Rs36,000 tax in a year.

Mr Ismail said that his priority was not to control inflation, rather he wanted to save the country from default. He said that he gave funds to utility stores so that they could sell flour at Rs40/kg; sugar at Rs70/kg and ghee at Rs300/L.

“There is no doubt that inflation has increased in the country. But I cannot help it. We have to save the country first. Soon pressure on rupee will ease and with this, prices of commodities will come down,” he expressed his optimism. 

The finance minister informed that this year we had wheat in abundance. He said that from next month, the government would try to increase its exports.

Demands early announcement of ECP verdict in foreign funding case 

On PTI foreign funding case, Finance Minister Ismail called upon the Election Commission of Pakistan to announce its reserved verdict. 

He took a swipe at Imran for condoning ‘little’ money laundering in his case. “The charity money collected for the Shaukat Khanum Hospital was diverted to fund the PTI,” the minister denounced the funds’ diversion. 

He asked Imran to immediately submit a reply in the prohibited funding case. “What are your afraid of? […] I urged the Election Commission of Pakistan to announce the verdict no matter what the Supreme Court does after.”