ISLAMABAD: Terming the energy crisis one of the major causes of low performance of economy, Federal Minister for Finance Mohamamd Ishaq Dar Tuesday said that growth rate during the outgoing fiscal year stayed at 3.6 per cent against the target of 4.3 per cent.
The average growth rate for the past five years remained as low as 3 per cent, which is alarming when compared to the 2.1 pc growth in the population, said Dar while addressing a press conference at the launching ceremony of Economic Survey of Pakistan 2012-13.
He was flanked by Federal Minister for Planning and Development Ahsan Iqbal, Secretary Finance Waqar Masood and other officials of Finance and Planning divisions.
He said almost 2 per cent of GDP growth was lost due to the energy crisis that aggravated due to circular debt and line losses.
Ishaq Dar said that fiscal deficit was also alarming. Against the fiscal deficit target of 4.7 per cent during the outgoing financial year, it is projected to touch 8.5 per cent, he said and added that the actual deficit figures could be finalized late tonight.
He said that there had been shortfall of about Rs 350 billion in the revenue collection while investment target of 14.9 per cent could not be achieved as only 14.2 percent investment was recorded.
The federal minister said that the agriculture sector witnessed growth of 3.3 per cent against the target of 4.1 per cent while the services sector witnessed 3.7 per cent against the target of 4.3 per cent.
Dar said that the industrial sector witnessed positive growth of 2.8 per cent against the target of 2 per cent while large scale manufacturing also witnessed positive growth of 3.6 per cent during the outgoing year.
Ishaq Dar was hopeful that despite challenges, the government had ability to put the economy on the right track.
He said that there was need of structural reforms and the government would have to take some painful decisions to streamline the economy.
He said that the government had past experience of coping with challenges as it remained successful in putting the economy on right track during the sanctions period.
He said that the previous government did not conduct labour force survey in 2011-12 and 2012-13, however, it would definitely be conducted in year 2013-14.
He said that based on the labour forces survey 2010-11, the unemployment rate was 6 per cent, which had increased considerably during the past two years.
Senator Ishaq Dar said that the circular debt had expanded to Rs 500 billion and become a major cause of energy crisis. He said that the previous government provided subsidies amounting to Rs 1400 billion, but that could not resolve the issue.
He said that the government would try its best to resolve the energy problem in the shortest possible time.
He said that another major problem in the energy sector was line losses and non-payment of bills and the government would make every effort to overcome them.
He added that it was the vision of PML-N leadership to revive and correct economy, adding if economy will improve the terrorism will be eliminated .
The Finance Minister said that his government has set a growth target of 4.4 percent for the new financial year 2013-14 and this will be gradually increased in the next four years through enhancement in public sector spending.
Senator Ishaq Dar added that for the government has allocated an amount of Rs.1155 billion for the Public sector Development Programme (PSDP) 2013-14 out of which the share of the federal government is Rs.540 billion against Rs.360 billion allocated during the outgoing financial years which is 50 percent higher than last fiscal year.
He added that this development spending would help enhance labour and productivity and bring prosperity to the people in the country.
Highlighting the circular debt, he said that this accumulated debt of Rs.500 billion would be cleared within sixty (60) to seventy five (75) days and government has device short, medium and long term plan to eliminate load-shedding in the country.
He expressed the determination of his government to bring inflation to 8 percent during the financial year 2013-14.
He warned that nobody would be allowed to play with the people, adding hoarding and undue profiteering would never be tolerated and strict action would be taken against those involved in such activities.
However, he said government would also create a business friendly environment and confidence of domestic and foreign investors would be restored in order to attract investments in the country.
He also appealed to the people to pay their due taxes and assured that IT based system would be introduced in the Federal Board of Revenue (FBR) and efforts through reforms would also be made to enhance tax to GDP ratio which is currently 8.9 percent and no country could afford this ratio if wanted prosperity.
Ishaq Dar stressed that need for having 20 percent investment to GDP ratio for the socio economic prosperity of the country.
He also vowed to revamp State Own Enterprises (SEs) by inducting true professionals and efficient heads including DISCOs purely on merit in order to reduces losses make them profitable organizations for the prosperity of the country.
He added that PML-N government wanted giving complete autonomy to State Bank of Pakistan (SBP) Pakistan Bureau of Statistic (PBS), Securities and Exchange Commission of Pakistan (SECP) .
He said that law regarding giving autonomy to PBS is ready and only its requires implementation and PML-N government would pass the law in this regard soon so that reliable and authentic data would be available to all stakeholeders when required.
Senator Ishaq Dar said that focus of his government will ensure a corruption free transparent and good government which is also the vision of the Prime Minister Mian Nawaz Sharif.
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