KARACHI: Chairman of the National Business Group Pakistan and President of Pakistan Businessmen and Intellectuals Forum Mian Zahid Hussain has said that a mini-budget has been introduced which includes a new tax of Rs170 billion, a one percent increase in general sales tax, GST increase on luxury items from 17 percent to 25 percent, federal excise duty increase on cigarettes and sugary drinks, and hike in FED on cement from Rs1.5 to Rs2 per kg.
He said the process of fulfilling IMF conditions for obtaining loans has been started, which is leading to a huge increase in inflation.
Inflation will go up to 27 to 35 percent and electricity, gas, petroleum products, and essential commodities will become more expensive which will hit the masses, he said.
Mian Zahid Hussain said that the life of the common man will become more miserable but there is no choice left.
Pakistan has to choose between a devil and a deep sea but inflation is better than bankruptcy because in case of default, commodities will disappear and inflation will increase manifold, resulting in looting and disorder everywhere.
He said that the government has spent more than five and a half months in the agreement with the IMF, waiting for the help of friendly countries, but now the implementation of the conditions of the international organization has started.
After the freeing of the dollar last month and a huge increase in the price of petrol, the burden of billions of rupees is being put on the consumers.
Now increased price of gas, expansive electricity, and enhanced taxation will cause unbearable inflation in the country which will affect every sector.
Only after the staff-level agreement with the IMF will be possible after which the loan can be issued with the approval of the IMF board, which will stabilize the foreign exchange reserves to some extent and the value of the rupee will improve a little, he said.
Only after a deal with the IMF, it will be possible for Pakistan to get loans from other sources and Pakistan's global ranking will also improve, which is constantly decreasing.
Mian Zahid Hussain said that the government should start efforts for the 10th review of the IMF, but for the health of the economy, there should be a plan to pay off the debt along with borrowing, for which import substitution, eradication of theft in electricity and gas sectors and sale of sick units will be essential.
Copyright Business Recorder, 2023
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