IT IS NOT A ROUTINE BUDGET
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 work on.
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 SBFC.
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 institutions.
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 generation.
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.