PIAF PREPARES 8-POINT ECONOMIC REFORMS AGENDA
May 16 - 22, 2011
Founded in early 1995 by a group dedicated businessman representing various industrial and trade bodies, Pakistan Industrial and Traders Associations Front (PIAF) is now the most effective voice of the business community after Lahore Chamber of Commerce & Industry.
The PIAF has successfully and gradually established itself as an effective business forum and invited businesspersons from all walks of life to join them and project their point of view.
PIAF has prepared an eight-point reforms agenda in a bid to persuade the PPP-led federal government to make the budget 2011-12 a milestone for achieving the goals of economic revival, public welfare, sovereignty, and self-reliance.
In the agenda, PIAF has called for evolving a comprehensive strategy to utilize the available resources efficiently, restructuring the public sector enterprises, removing the weaknesses of the taxation system, improving the electricity bill collection system, and taking steps for cutting down cost of doing business.
Engr. Sohail Lashari who did his F.Sc. from Government College Lahore and B.Sc. Engineering from University of Engineering & Technology Lahore, is sitting Chairman PIAF. Lashari also worked as project manager for Duko irrigation Project which involved laying of pressure pipelines for irrigation with sprinkler system and drip irrigation. In the agenda document, PIAF Chairman Sohail Lashari spoke on heavy borrowing from international donors, complex taxation system, repeated increases in electricity rates, inflation, unemployment, law and order, and high cost of doing business and urged the government to focus on these areas in the forthcoming budget. He said that size of borrowing from IMF and World Bank has crossed the mark of US$54 billion while the government's dependence on external debt was hitting the independence and sovereignty of the country. Repeated increase in the electricity prices was the result of IMF strict conditionalities while industrial input cost was growing with every passing day and Pakistani products are becoming in competitive in the international market.
PIAF Chairman urged the Federal Finance Minister to evolve strategy to get rid of foreign loans and also restructure the public sector enterprises that are eating up billions rupees annually. He said that government needs to remove the weaknesses of the taxation system instead of implementing the forced Reformed General Sales Tax (RGST). He said that approximately, 30 percent taxes are being eaten up by the corrupt elements while the tax officials were misusing their discretionary powers. He said that instead of enhancing the taxation net, tax official were utilizing their all energies to squeeze those taxpayers who were already in the tax net. He said that government should lower the tax rate that would encourage the people to come into the tax net.
Sohail Lashari said that some other public sector enterprises, WAPDA has become a white elephant and there was loss of Rs391 billion due to mismanagement and incompetence of the relevant officials. He said that power theft was continued in the name of line losses with the connivance of officials. He demanded of the government to end power theft with iron hands and official involved should be punished. He said that government has to improve the electricity bill collection system, otherwise, situation would further worsen.
PIAF Chairman urged the government to allocate funds for Kalabagh Dam in the federal Budget 2011-12. He said that construction of Kalabagh Dam was a must to ensure availability of water to the agriculture sector and cheaper electricity to both the trade and industry of the country. He said, in this regard, the government should develop consensus among and the federating units by convincing them that this was the only way out of ongoing power crisis. He said that government should also launch coal based power projects. He said that government should also cut in the expenditures of government. He said that though the country was under the heavy burden of internal and external loans.
He said economic prosperity would remain a dream unless and until all the Pakistanis, irrespective of their status, play their constructive role. Pakistan at the moment is passing through most critical times of its history and in the present scenario the role of business community has become even more important.
Former Chairman Pakistan Industrial and Traders Associations Front (PIAF) Irfan Qaiser Sheikh said that turning around of the economy is a doable job but the government would have to chalk-out a common economic agenda with a clear-cut implementation mechanism so that desired objectives could be achieved.
According to him, no measures would work until and unless the issue of energy is resolved. The country needs to utilize indigenous resources to overcome energy shortage while the option of importing electricity could also be availed as a short-term solution to this menace which has taken its toll.
Mr. Irfan Qaiser Sheikh said that there are certain economic issues including low growth rate, high inflation, rising unemployment, continued fiscal indiscipline, growing poverty, surging food and energy prices, expensive credit to private sector, alarming increase in government borrowing, profound circular debt, poor revenue collection coupled with increased spending, and low foreign investments and above all low tax-to-GDP ratio. He said: "These issues need some out of box measures. Western economic theories cannot be applied in Pakistan where most of the economy is in non-documented sector. Lowering tax rate is the best way to lure non-documented sector into tax net. Government should lower sales tax rates for all manufactured goods to five percent but continue charging 17-percent GST on utilities like electricity, gas and telephones."
He further said that the documented sector should be given exemption certificates for sales tax on utilities while the non-documented sector should be asked to pay until they come in taxation net. He said that industrial degradation due to unavailability of gas is not only jacking up graph of unemployment but it has also hitting exports hard and creating law and order situation as well. Therefore, for keeping industrial wheel on the move, should be the topmost priority of the government.
Mr. Irfan Qaiser Sheikh expressed grave concern over fast rising banking spread. He said that banking sector is making huge money at the cost of trade and industry and the State Bank of Pakistan must take notice of this situation. He said that cheaper availability of money to the business community is one of the prerequisites to break the economic logjam. He said that high markup rates are another area where a full concentration of concerned quarters is direly needed. The government should ensure that the next budget is prepared in accordance with available resources. Non- developmental expenditures should be cut by 30-percent and the expenses of the presidency, prime minister, chief ministers and federal and provincial cabinets should be cut by 60-percent by withdrawing all perks, he added.