ISLAMABAD: Minister of State for Finance Dr Aisha Ghaus Pasha has stated that there is a need to reform the pension bill as rapidly increasing liabilities of civil and military pension is a sizeable part of current expenditure which is simply unsustainable.
The minister stated this in response to questions of the media after the break of the morning sitting of the Senate Standing Committee on Finance presided over by Senator Saleem Mandviwala that began deliberation on the Finance Bill, 2023.
The state minister said that the civil and military pension chunk was significant in the current expenditure and this is the area where reforms are important as there has been a rapid increase in this liability, which is not sustainable.
Pasha said that the Pakistan wants the 9th review of the International Monetary Fund (IMF) to be completed before 30th June 2023 when the ongoing extended fund facility program would end. We have shared budget numbers with the IMF and are in touch with the fund and they are seeking clarifications as well as discussing data with the FBR and the SBP. “We are insisting to complete the 9th review,” she added.
The minister said that an exemption has been given to achieve the objectives of agriculture transformation and services sector to boost exports.
She said that the state of the economy is with low growth of 0.29 percent, the economy has to be taken ahead for which incentives would be given to achieve the objectives of growth, employment, and address the problem of recession.
She said that the managing director of the IMF has also stated that poverty is a challenge which the minister said stems from unemployment, low growth, and recession. We will be able to convince the IMF on the issue of exemption, said the minister, as the government’s objective of giving exemption is to increase growth, create employment, and alleviate the poverty level.
The minister said that the friendly countries, KSA and the UAE, have assured commitment to the IMF. The KSA and the UAE have given assurance of funds to the IMF, she said. However, she hinted at an increase in electricity and gas tariffs in case the agreement was not reached with the IMF.
The minister said that there was no proposal under consideration to freeze the foreign currency account.
Earlier, in the committee, she said that the government has imposed over Rs220 billion in new taxes in the budget. The minister said that the IMF wants Pakistan to show a primary surplus, as well as, an increase in the tax-to-GDP ratio.
She also said that the government has given targeted subsidies as per agreement with the IMF.
She added that there was no point criticising the budget and maintained that the country was saved from default even after the disastrous floods and global climate crises.
She said that the new budget envisages agricultural packages, which are the backbone of the economy and would increase growth in the shortest possible time.
Copyright Business Recorder, 2023