ISLAMABAD: Finance Minister Shaukat Tarin said on Monday that a policy has been prepared to shift from stabilisation mode to economic growth, and the International Monetary Fund (IMF) would be asked for providing relief in some conditions – such as increase in electricity tariff – owing to the situation faced by Pakistan.
The finance minister, during a meeting of the National Assembly Standing Committee on Finance, said, on Monday, that “we will try to convince that increase in tariff and circular debt issue would be other means for revival of growth as increase in power tariff was hurting growth and compounding circular debt."
Later, while talking to media persons in response to a question, he said, “I did not say whether the IMF was fair or unfair to Pakistan. In present conditions we have to see in what areas the country required relief from the IMF”.
To another question about inflation, he said that the last year inflation was low and that the increase was appearing two percent but the government was taking all the actions to bring about price stability as it was important for it.
Earlier, during the committee meeting, he said that discussions with the IMF would be on increase in electricity tariff and he would try to convince them that increasing in tariff would lead to more corruption on account of theft; however, circular debt target would be achieved through other means.
Additionally, he said the government does not believe in increase in taxes but would bring those not paying taxes into the tax net, and the harassment of people by Federal Board of Revenue (FBR) would be done away with.
The minister said that at least 5 percent increase in GDP growth was critical for the country to provide employment opportunities, otherwise, the country would be facing serious problems in the coming few years as Pakistan was committed to stabilising the economy from 2019 under harsh conditions of the IMF programme.
As a result, he said growth was badly affected.
He said the government has been paying capacity payment charges and if there was growth in the country, electricity would have been consumed and capacity payment charges would have increased.
As long as the growth would not increase nothing would change from revenue collection to providing jobs to the people and increase in the productivity.
Tarin said that “if we continued with the economic stabilisation, there would be no increase in the economic growth. Absence of economic growth has been creating enormous problems for the country."
Tarin said those institutions not being run by the government would be privatised and the development budget would be increased in the coming budget to increase growth, and all the provinces would be provided equal opportunities for achieving growth.
The Finance Minister said: “a policy has been prepared to shift gear to move on path to economic growth and the IMF would be requested that when all over the world countries are doling out stimulus packages and ‘economies’ purse’ are open there is a sword hanging on Pakistan so please show some kindness on us.”
He said the government would try to comply with the IMF conditions but discussion will be held with the Fund on increase in electricity tariff as it was increasing corruption, and target of circular debt would be met through other means. He added the government does not believe in increase in taxes but would bring those not paying taxes into the tax net and audit procedure would be changed while powers of the FBR officials would be reduced.
About sharing his plans as finance minister, he said that further steps would be taken to increase revenue without being unfair to anyone. According to him, as there is lack of proper planning, the government has selected 10 to 12 sectors for proper planning and economists have started working on them and these include price stabilisation, agriculture, industry, revenue, housing, social security, national services, debt management, and privatisation of loss-making state-owned enterprises.
The Finance Minister said the 85 percent of the entire revenue of the provinces is being spent on only nine cities, adding that “very little is spent on health and education.”
He said that there is a need to pay more attention to the housing sector as it is only 0.25 percent of the country's total GDP, while the rest of the world was far ahead from Pakistan as the US housing sector accounts for “80 percent” of country’s GDP. “We will revive industrial units, more funds would be allocated for social protection as people remained neglected during the last 70 years and there is a need to spend more on health and education.”
He said that country’s exports are not growing because there is no foreign investment while most of the business are locally-based.
He said that foreign investment will be given preference on CPEC special economic zones.
The chairman and members of the finance committee welcomed the finance minister when he reached in the committee as his predecessors were a rarity in the finance committee meeting. Tarin said that he believes in the supremacy of the Parliament and would be appearing in the National Assembly Standing Committee on Finance.
Copyright Business Recorder, 2021