Federal budget 2018-19: LCCI gives mixed reaction

The Lahore Chamber of Commerce and Industry (LCCI) has given a mixed reaction on the federal budget 2018-19 and called for rectification of the implications and reservations of the business community by the National Assembly when the budget document will be presented for debate and approval.
While addressing a press conference soon after the budget speech, LCCI President Malik Tahir Javaid said that some good announcements including limit enhancement for income tax exemption, removal of regulatory duty on important raw materials, increase in development budget, allocations for agriculture and livestock sectors and increase in pensions have been made in the budget.
He, however, said there are also some questionable lacunas that must be tackled by the National Assembly.
Malik Tahir Javaid said increase in allocations for water and power projects would help get rid of energy crisis. Funds for infrastructure development would also attract foreign investment. He said that increase in defence budget was need of the hour as the country is facing security challenges. He also welcomed announcement for refunds, agriculture support fund and composite audit.
LCCI president said that as usual federal budget is of deficit and it has not mentioned that how this would be handled. He feared that the government would go for borrowing that would aggravate the economic conditions. He said the huge amount of over Rs 1600 billion has already been allocated for debt servicing in the federal budget 2018-19 while further borrowing would be ringing alarming bells.
He said borrowing should not be the part of government policy to overcome the budget deficit. He said one of the best ways to reduce the budget deficit is to promote economic growth.
He said high economic growth is the finest way to reduce the budget deficit because it would also enhance the government revenues.
Malik Tahir Javaid said that removal of withholding tax on banking transactions was the longstanding demand of the business community but the government has ignored this issue and decided to continue that would cause trust deficit and hamper the expansion of tax net.
"Unfortunately Kalabagh Dam is not part of the federal budget 2018-19 which means the country would not have a new big reservoir in near future and all sectors whether it is agriculture or manufacturing sector would be suffering due to water scarcity," LCCI president added.
He said that still time is available and ball is in the court of National Assembly that can make budget document a complete economic revival plan by removing harsh measures for trade and industry.