ISLAMABAD: Stressing the need for evolving consensus on Vision 2018-23, Finance Minister Senator Mohammad Ishaq Dar Saturday reiterated government’s resolve that macroeconomic gains would not only be saved and consolidated but would be built further to ensure entry of the country into Group 20 (G20) countries by 2020.
Addressing the post-budget press conference here, the Finance Minister highlighted the importance of unity and hardwork to achieve this goal.
He stressed the need for evolving consensus on the Vision to lead the country towards progress and development, adding this was the best time for it before going into general elections 2018.
“What are our targets, and where do we want to lead the country, should be clear and this is the best time to have a Charter of Economy and Roadmap,” said the minister.
He said that microeconomic progress and achieving social economic targets were the goals and “we can lead the country towards achieving thses with unity.”
The Finance Minister said that instead of a routine three-year medium term plan, the government in the budget document, had introduced a five-year vision 2018-23.
The Vision, he said aimed at focusing on the second generation reforms including deepening of financial market, improving ease of doing business, enforcing property rights, improving regulatory apparatus, enforcing rule of law, creating a credible and efficient judicial system and to build an institutional foundation that can sustain economic growth and give protection against external shocks.
The Vision envisages growth above 7 percent and highlights that over the next five years, the key drivers of economic growth should be investments, environment of competition and innovation with the private sector as an engine of growth, he added.
He said the government institutions should be reformed to focus on improved service delivery and better regulations to support the growth momentum while governance, transparency, accountability and business-friendly environment should become the key focus of country’s policies.
Minister for Finance Ishaq Dar said that the government had set ambitious targets for fiscal year 2017-18, and it would hopefully meet all the targets. He said keeping in view growing demand of the country’s development, the government had allocated the highest amount of Rs 2.113 trillion for various developmental projects of National PSDP including Federal PSDP share of Rs 1001 billion as well as provincial share of Rs 1.11 billion.
The minister said the agriculture growth rate during ongoing fiscal year stood at 3.46 per cent and it would further increase in the next year due to government’s numerous relief measures for the sector including allocation of over Rs 1000 million in term of agriculture credit, decrease in sales tax on DAP fertilizer by Rs 300 per bag and huge subsidy of over Rs 27 billion on tubwells. He said small farmers who own not more than 12.5 acres of land, would get small agriculture loans up to Rs 50,000 at fixed mark-up rate of 9.5 per cent and all banks would be bound to provide loans on this interest rate.
Dar expressed the hope that the government would not only achieve the target for real GDP growth rate of 6 per cent but it would go beyond the target. Similarly, he said inflation rate would remain under 6 per cent by the end of next year and the non-development expenditures would not exceed the country’s inflation rate. The minister also hoped to sustain the public debt to GDP ratio under 60 per cent. Regarding electricity production, the minister reiterated the government’s resolve to ensure inclusion of 10,000 MW into national grid by next year.
“The Prime Minister himself is monitoring the electricity production situation and he had directed all concerned departments to ensure that the country would be load-shedding free in 2018”, he remarked.
Ishaq Dar informed that the government had increased Rs 121 billion expenditures in social safety net sector. He said in a bid to increase job opportunities in the country, the Information Technology Ministry had been advised to train over one million youth to earn through free-lancing. “Currently around 200,000 people are linked with free-lancing and they are earning money from different online sources from around the world and by next year this number would exceed one million”, he added.
The finance minister said that the government has announced Rs 120 billion new tax measures while total tax relief measures stood at Rs 33 billion, therefore, the net revenue impact would be Rs 87 billion.
The finance minister, however, said more tax burden had been put on the non-filers, which, besides discouraging them, would help broaden the country’s tax net.
He said since the government had not touched the regime of milk in the budget, therefore, its retailers had no reason to increase the prices of the essential commodity.
He said the special package of Rs 180 billion announced by the government for the textile export sector would continue in the next fiscal year (2017-18).
Regarding tax refunds, the minister said all refunds of up to Rs 1 million would be cleared by July 15, 2017 and the rest by April 30, 2018.
“In order to further facilitate the tax payers, all the filers will receive their refunds directly in their bank accounts,” he added.
Furthermore, the minister said the government had planned to activate the Pakistan Development Fund and for the purpose, bonds worth Rs 1 billion would be issued for the Pakistani diaspora living abroad.
He said 10 per cent adhoc relief of basic salary of the federal employees had been proposed after merger of the adhoc relief of 2009-10 in the next fiscal year plan.
He said allocation for the Pakistan Bait-ul-Maal had been increased by 50 per cent to Rs 6 billion from Rs 4 billion.
Dar clarified that house building loans of widows of upto Rs 500,000 would be written off.
He said in order to rationalize the rate of sales tax on steel sector, the existing rate of Rs 9 / unit of electricity was being enhanced to Rs 10.5 in consultation with the industry and corresponding increase would be made in ship-breaking and other allied industry.
He said to promote the ease of doing business the issues of the steel industry would be resolved in consultation with the industry.
The minister said the cement sector was registering substantial growth and it should contribute in governmental revenues. Increase in FED on cement from Rs 1/ kg to Rs 1.25/ kg had been proposed, which, he said, would not likely to impact prices as the cement industry would absorb it, he added.
To a question, the finance minister said the government had initiated several schemes, which would create employment opportunities for the youth.
He said the Prime Minister’s Youth Schemes including business loan scheme, interest free loan scheme, training scheme, skill development programme, fee reimbursement, and laptop programme, would continue during the fiscal year 2017-18.
He said the government had also announced in the budget to provide training to one million youth in information technology, which would also help provide them jobs.
The minister clarified that the circular debt was not cleared in just two days in 2013, rather it was paid off in 45 days.
There was a dire need to overcome electricity losses for ending load-shedding, he added.
To a question, Ishaq Dar said all the refund claims would be addressed by August this year.
The minister said administrative actions would be taken against profiteers, who had taken undue advantage of budget announcements.
The National Food Security and relevant quarters would be directed to check prices of daily use commodities in the market, he said, adding that no increase had been made in the prices of food commodities in the federal budget.
