President Pakistan Businessmen and Intellectuals Forum (PBIF), President AKIA, Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid on Friday lauded the relief package for poor but dubbed allocation of Rs15 billion as insufficient.
The funds allocated for the purpose are inadequate as per capita expenditure after deducting administrative and other expenses and losses will be around Rs100, he said. Talking to the business community, the veteran business leader the project needs more funds and added clarity to make it a success.
The former minister noted that the IMF has demanded additional revenue collection of Rs200 billion for which government will have to consider a new mini-budget, enhanced sales tax on various items, jacking up tariff of electricity and gas and sale of assets.
However, he said that privatization proceeds cannot be shown as revenue under the law. Mian Zahid said that FBR has started considering increasing sales tax to 17 percent on a number of items attracting sales tax at a rate of 7, 10 and 15 percent.
Some of the items include oilseeds, cotton, plant and machinery, dairy products, used clothes and shoes, tractors, poultry machines and LNG imported for CNG stations. He said that it is not only inflation but all the important indicators of the economy are disturbing.
The growth rate is 2.2 percent, a 10 year low, public debt has increased by 40 percent in a year and a half, import compression and 13.25 percent interest rate has discouraged investment, while frequent revision in electricity and gas prices have become a disincentive for producers and exporters.
Exchange rate liberalisation has added to inflation and public debt while it failed to boost exports. The infamous circular debt is mounting despite claims by the government to reduce it, exports are stagnant for the last five years while masses are running out of patience.