ISLAMABAD: Despite challenges, particularly energy crisis, the economic growth is expected to remain highest in three years at 4 percent during the current fiscal year, surpassing the Gross Domestic Product (GDP) target of 3.6 percent, Federal Minister for Finance, Dr. Abdul Hafeez Shaikh said Thursday.
"The 4 percent growth rate would be highest one during the last three years," the federal minister remarked while talking to leading businessmen during budget consultation meeting held here with an aim to get input from business community before preparing next budget for fiscal year 2012-13.
Shaikh said that although the country was passing through crucial situation, however there are some sectors of economy that have been showing strength.
He said, the government has also made some decision last year to enhance tax to GDP ratio which he said have been now showing positive results.
So far there has been 25 percent increase in revenues collection during the eight months of current year and if the trend continues and Federal Board of Revenue (FBR) achieves the revenue collection target of Rs.1925 billion set for this year, it would be 25 increase in taxes, which is unprecedented.
He said that exports also crossed $25 billion last year and expressed the hope that the government has been trying its best to achieve at least same target this year. He said that there has been increase in exports during first 8 months as compared to the corresponding period of last year.
He said over $11 billion remittances were recorded last year while the strong growth continues this year also.
Shaikh said that despite the fact that country was passing through crucial stage, the government kept on providing help to vulnerable segment of society and had provided Rs.50 billion for the Benazir Income Support Fund during the current budget to help the poor.
In addition, the government also provided fertilizers on subsidized rates as it had to import fertilizers to meet the domestic needs.
He said the government was focusing on promotion of trade and realignment of relations with major powers and regional players as it has been engaged with India and other regional countries to improve relations.
In addition, there has also been progress as far as access to European markets is concerned while dialogue with US is also focused on getting access to that market.
He said that government was committed in job creation to give the youth a hope and ensure progress and prosperity of the people.
Terming the energy crisis as threat to economy, he underlined the need of improving energy governance at government level besides streamlining energy prices, encouraging investments and enhance capacity of energy units.
He said that external financing also need to be strengthened by increasing exports and remittance and by bringing investments into the country.
He said that currently country was passing through transition stage where new financial public finance arrangements between federation and provinces have taken place. Provinces have been provided Rs.700 to Rs.800 billion while the federal government has frozen its expenditures during the budget 2011-12.
On the occasion, businessmen gave several suggestions and proposals for the improvement of economy and also highlighted the importance of broadening tax base and providing incentives to taxpayers to help enhance overall revenues of the country.
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