The Federal Cabinet has approved the budget strategy paper for the next fiscal year with Finance Minister acknowledging that the country would miss the budgeted GDP growth target of 5.5 per cent for the current fiscal year due to a massive decline in cotton production. A meeting of the Cabinet presided over by Prime Minister Nawaz Sharif on Wednesday was informed that the GDP growth rate is projected at 5 per cent in the current fiscal year against the target of 5.5 per cent primarily due to severe setbacks to the cotton crop.
Finance Minister Ishaq Dar said the government is concentrating on major policy initiatives that are aimed at consolidating economic gains achieved so far and spurring inclusive and sustainable growth, creation of job opportunities and a reduction in poverty. The meeting was informed that fiscal deficit has been on target for closing at 4.3 per cent and current account deficit has been reduced from US $1.9 billion in Jul-Mar 2014-15 to US $1.6 billion in the same period of 2015-16.
The Finance Minister said tax collection by Federal Board of Revenue (FBR) has increased by 19 percent during the nine months with a tax collection of Rs 2103 billion. He said that there has been a considerable increase in the number of taxpayers in the last three years.
He said that in the medium-term the government's plan is to gradually raise GDP rate to around 7 percent and contain inflation to single digit, ie, less than 6 percent. He said they intend to bring down fiscal deficit to below 4 percent in the next financial year. Dar said this will be the fourth budget of the present government and every year the government pushes forward its reform agenda with prudent fiscal policies that will usher an era of development and prosperity for the people of Pakistan in coming years.
The meeting chaired by the Prime Minister condemned the baseless allegations against Prime Minister Nawaz Sharif levelled by International Consortium for Investigative Journalists (ICIJ); which they themselves now acknowledged as a journalistic mistake. The meeting demanded that the ICIJ should determine the identity of those responsible for the mistake and proceed for immediate action against them.
He stated the current trend of GDP growth would continue to increase employment opportunities for the youth. He noted that with the CPEC projects commissioning in the next few years, there will be huge opportunities for the whole region to benefit. The Federal Cabinet reposed its full confidence on the leadership of the Prime Minister and appreciated his decision to present him and his family for accountability before the Supreme Court of Pakistan. The Federal Cabinet further expressed its resolve that "opportunists" will not be allowed to sabotage the stride of Pakistan towards development and prosperity.
Nawaz Sharif stated that government's economic policies should be welfare oriented, ensuring the benefits of economic progress and be delivered to the common people. He appreciated the fact that the overall economic progress achieved during the last three years of the present government had set the stage for further progress and development of the country. He noted that the key economic indicators, which were at rock bottom three years ago, have improved remarkably and the situation would lead to allocating more resources to the welfare of the poor and promoting the development agenda of the government.
The Prime Minister expressed satisfaction over the strategy for increasing revenue collection and underscored the need for further strengthening the taxation system by widening the tax net. He further said the government has made efforts towards lowering the fiscal deficit to a reasonable level by inducting financial discipline in the public sector.
Nawaz appreciated the contribution being made by expatriate Pakistanis through their remittances to Pakistan. He directed that steps should be taken to facilitate overseas Pakistanis to send remittances through banking channels. He directed Ministry of Commerce to gear up efforts towards increasing exports.
The Cabinet meeting stated that benefits of mega projects in the pipeline will start unfolding from the next year; immediate measures are needed to encourage investment by the private sector. He said the Chinese Council has already approved US $4.5 billion for projects of Sukkur-Multan and Havelian-Thakot motorways. He said from 1999-2013, successive governments have failed to invest in energy sector and incumbent government has initiated a number of energy projects for power generation. The US $34 billion of energy projects under the CPEC are investments and not loans, he added. He said the government will successfully overcome the gas shortage within the tenure of the present government.
The Prime Minister further said that all the international financial institutions have acknowledged the economic turnaround of Pakistan. He mentioned that efforts are being made by a few political opponents to undermine the country's economic take-off, but the people of Pakistan will not allow them to succeed. The issues of agriculture and manufacturing sectors to boost growth must be addressed, he emphasised.
The Prime Minister appreciated the performance of the Finance Minister and his team on achieving the goal of economic stability in the country and carrying forward the development agenda. He said that efforts have been made for keeping the inflation rate under control and observed that the average inflation during past three years remained the lowest. He expressed satisfaction that the expected large scale manufacturing at a growth rate of 4.35% will be the highest in the last eight years.
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