is not a routine budgetShaukat Aziz
Post budget seminar
By FARAZ SIDDIQUI
Jun 26 - Jul 02, 2000
Addressing a post budget seminar organized by the News-Jang Forum at
the ICN Auditorium, Finance Minister, Shaukat Aziz asked the traders to end up the rate
culture, date culture, stock culture and rent seeking culture of traditional askings for
favours. He said that government believes in dialogue and definitely welcomes the
suggestions on macro issues from traders and industrialists but they should play their
role too. Government is also trying to eradicate SHO culture from tax system and planning
for consistent long term policies for the country, he added.
He said that it is not a routine budget but the part of three years
macro economic framework. Aziz said that this budget is totally the reflection of 99 per
cent CE speech in December which provides a clear dimension to the country for future. He
further said that this budget provides consistent policies and framework to the country to
Aziz said that the macro stability of the country is the main objective
of the government, this can only be achieved by increasing resource mobilization, stop tax
evasions and broaden the tax base in the country.
Government is not intended to present any mini budgets, in case of any
shortfall government has planned contingencies plan in future. He said that this budget is
a complete plan of action for coming three years. Government has taken revolutionary steps
to restructure the economy. Finance Minister hopes to achieve 6 per cent GDP rate, 4 per
cent inflation rate, investment rate of 18 per cent and budget deficit 3.2 per cent in
next 3 years. in next three years. Present reserves of foreign exchange for four weeks
will be increased upto twelve weeks import bill. The growth in tax revenue was 17 per cent
in fiscal year 1999-2000, now hopefully it will be expected to rise up to 24 per cent next
current year, he added.
Briefing the measures taken in budget, Shaukat Aziz said, poverty
alleviation is the main target of the government and Rs 21 billion has allocated for
poverty alleviation programme specially focused on rural areas. A food support programme
is also launched, 1.2 million familes would be offered Rs 2000 annually with a view to
helping the most financially deprived section of population. He further said, through
Zakat and Ushr programme poor people will be assisted by Rs 500.
He said that Government also wants to restore the investor's
confidence, abolition of wealth tax is also a part of this chain. He said that mark up on
bank loans has been decreased by 1.5 per cent to facilitate the bank borrowing. A
consultative process will be introduced in order to make the easy availability of credit
possible for the investors. Through this budget government wants to encourage investment
in industry specially in small and medium sector.
Without promoting our exports we can not boost up the economy, he
added. He said that the payment of 70 per cent tax refund will be paid in 24 hours of the
filing of the claim, thus it will lesson the problems of the exporters specially medium
and large. Government has allocated a huge amount of Rs 10 billion for refunds which will
be provided by the government to the exporters by the end of June 30. Government has also
announced pass book scheme for the exporters for duty free import of raw material. Export
refinancing scheme will also help the small and medium exporters.
Finance Minister said that the budget is planned on the basis of three
basic economic drivers namely agriculture, small and medium enterprises, information
technology and oil and gas.
Agriculture is the back bone of our economy, duty on oil seeds will be
increased in order to encourage the local production, he added. Corporatization of
agriculture will be progressed in order to utilize the uncultivated land. Aziz said that
in provincial budget there is an imposition of agriculture tax on big land owners. This
year, it is estimated that wheat crop of worth 21 million tonnes is expected which will
certainly increase the GDP ratio upto 5 per cent and we will be able to export 1 million
tonnes of wheat this year.
Small and medium enterprises play a vital role in the progress of any
country, government is trying to make easy availibility of credit to small and medium
enterprises. system of micro credit banks is going to start its operation from 14 August.
Initially loans of 20,000-25,000 will be provided in order to facilitate the small and
business enterprises, specially needy persons. Small business and Finance corporation will
also provide support in this regard and professionals will look after the affairs of
IT is the top priority of the government because we can not survive in
this era without having an edge over IT. Cost of internet banwidth has been reduced by 53
per cent to provide the common man with reduced prices. Government has launched a separate
division for the establishment of IT. He also said that we have given a number of
concessions and tax exemptions on computer related accessories. For the rapid development
of IT, government has also given tax exemptions to IT training and educational
Oil and gas is the last driver in this regard. Aziz said that
government is allowing the private sector to import furnace oil, the government will not
import it anymore. Now Wapda, IPPs and sugar industry would allow to import the furnace
oil, although the government will monitor the prices through NEPRA. He further said that
LPG sector will be totally deregulated in September and with the operation of PARCO
refinery there will be surplus LPG in the country. On 23rd of this September CE would hold
a meeting to analyse the options of switching over from furnace oil to gas for power
He said that a committee was formed which will present its report to
the CE about the present debt position of the country for approval and it will hopefully
approved. This report enlightens the over all scenario regarding debt position. Rate of
return on national saving schemes also reduced by 1.5 per cent. A committee is also formed
who will first deal the cases before putting it forward to NAB. All the banking cases will
put forward after the approval of SBP.
Answering questions Finance Minister said that our objective is to
reduce the cash in the economy. Implementation machinery will be made more effective for
timely imposition of the policies , tax system and CBR would be revolutionized and the
process of GST survey will be completed as per schedule. . He also said that this
perception should be avoided that every thing is dictated by the IMF, we have master minds
and highly skilled professionals who can independently think.