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ISLAMABAD: The federal government informed the Senate on Thursday that the steps taken by the former government like those of making the State Bank of Pakistan (SBP) “independent” needed to be revisited and Chairman Senate Sadiq Sanjrani sought a report from the governor SBP over receiving instructions on the government decision to lift a ban on import of raw material.

In the Senate proceedings, independent Senator Dilawar Khan, during question hour, said, the federal government on May 27, issued an SRO (statuary regulatory order) to lift the ban on raw material. This order, he said, needed to be passed to the SBP in order to facilitate the importers.

Lifting the ban on raw material would help generate sales tax and federal excise duty (FED) that would boost revenue, he added.

Responding to Khan, Parliamentary Affairs Minister Murtaza Javed Abbasi said, “Unfortunately, when SBP was made independent, the former government should have thought about whether it will be able to defend the benefits of our financial system.”

Referring to the SBP’s decision to increase interest rate by 1.5 percent, Abbasi said, the previous government gave a “free hand to such institutions without thinking— and its direct impact is on our business community and banking system. This needs to be revisited.”

The chairman Senate directed the secretary Senate to get a report from the governor SBP through the secretary finance on receiving the government’s order on lifting the ban on the import of raw material.

Apart from that, speaking on a calling attention notice moved by him on “current deteriorating economic condition of the country and the steps being taken by the government,” former finance minister Shaukat Tarin strongly criticised the federal government for severe economic decline in the wake of unprecedented inflation.

Tarin said National Accounts Committee issued data over two weeks ago that was signed by the current government ministers.

According to this data, Tarin said, GDP (gross domestic product) was recorded 5.74 per cent in the last fiscal year and 5.94 per cent in this fiscal year under previous government. Agriculture growth was recorded at 4.4 per cent, industry: 7.2 per cent, large sale manufacturing: 10.5 per cent (27 per cent in March alone), services: 6.2 per cent and revenue: 29 per cent (heading towards Rs 6.1 trillion).

Tarin said current Finance Minister Miftah Ismail admitted this progress during his visit to the Federal Board of Revenue (FBR).

The former finance minister said that Pakistan’s exports were recorded at 27 per cent and were going to touch the billion-dollar for the first time. Remittances were recorded at Rs19 billion in 2018 compared to Rs31 billion being predicted now with a growth rate of 7.5 per cent, the senator stated.

The commodities super cycle was affecting the current account deficit that was recorded at $ 13.2 billion in nine months, Tarin said.

Out of them, $ 12.5 billion was due to the super cycle of four commodities; petrol and LNG (liquefied natural gas), vaccine, coal and edible oil.

“If this super cycle is controlled, then current account deficit is not an issue,” the former minister said.

The economic growth Pakistan achieved under the previous government is not unsustainable, he added.

The former finance minister said, the ruling coalition, comprising 13 political parties, failed to take tough and timely decisions in five weeks that have caused a severe economic debacle.

“You have to take IMF (International Monetary Fund) into the loop. If the IMF is not in the loop, then no other international financial institution will help you,” he added.

Copyright Business Recorder, 2022

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