Talking at a pre-budget seminar organized by
Management Association of Pakistan (MAP), Shaukat Aziz, Minister for
Finance and Economic Affairs said that preparation of budget was no
longer a confidentiality. Now the government fixes achievable targets
with the active participation of all the stakeholders. The aim is to
create enabling environment rather than seeking SROs driven investment.
The GoP no longer wishes to be in the business of managing business and
wants the private sector to play its due role. The GoP wishes to be only
the facilitator. With the improvement in most of the economic indicators
the economic sovereignty of Pakistan has improved considerably but there
is no room for complacency. A lot more has to be done to achieve over 6%
GDP growth rate.
The GoP plans to achieve a number of targets over the
next five years. These include, achieving over 6% GDP growth rate,
raising per capital income above US$ 600, keeping inflation below 5% per
annum, improving investment to GDP ratio and developmental expenditure
as percentage of GDP and bringing down public debt. Most of these
targets are achievable. However, there are certain pre-requests
necessary for achieving the targets. These are regional and domestic
political stability, law and order situation, consistent and transparent
policies, consistency of ongoing policies and above realization of
To achieve the targets the GoP is focusing four
priority areas. These are agriculture, large scale manufacturing,
construction and small and medium enterprises. Since the largest
percentage of population lives in rural areas, the problems facing the
agriculture have to be resolved. The priorities are to ensure adequate
supply of irrigation water, availability of inputs at affordable prices,
credit for procurement of seeds, fertilizers and agricultural
implements. At the same support prices of various crops are revised
regularly to take care of inflation factor. With the improved purchasing
power of farmers demand for a number of items is expected to improve.
The robust performance of manufacturing sector, above
10% during the current fiscal year so far indicates better capacity
utilization. At the same time, higher credit off take by the private
sector hints towards expansion of existing capacities, mainly for value
addition. With the expansion of textile manufacturing base in the
country, exports are expected to improve both in terms of quantities and
in terms of value. To facilitate the exporters the GoP plans to further
rationalize tariff regime, particularly duty drawback system.
Construction activities in the country have picked up
lately due to large inflow of funds. To further facilitate owning of a
house, the government has come up with improved housing finance policy.
Most of the banks are now actively participating in housing finance
business. The boom in construction industry is not only creating job
opportunities but also providing new impetus to a number of other
industries. According to experts a vibrant construction industry
supports over 42 different industries. With the improved fiscal
condition the GoP plans to allocate higher amounts for infrastructure
projects, healthcare and education. Along with this the GoP also aims
implementing structural reforms at provincial and district government
levels. All these efforts are improving the quality of life of masses.
Earlier in his presentation Ebrahim Sidat, bought to
the notice of the Minister, the various demands of trade and industry.
He was of the view that sentiments have improved from gloomy to
optimistic. To capital the change in mind-set, the various irritants,
though may be small, must be removed with further delay. He particularly
highlighted the need for changing the tax policy. It is true that each
citizen must contribute his or her share in tax, the policy of double
taxation and squeezing the existing taxpayers should be stopped. There
should be incentive for investment in the form of investment allowance
and withdrawal of tax on dividend income.
In his welcome address, Masoud Naqvi, President of
MAP thanked the Minister. This seminar was arranged at a very short
notice. However, the large attendance of senior executive and
professional managers confirmed that people in Pakistan want to make
contribution in preparation of budget. The process of mutual
consultation with all the stakeholders must continue at every level.