Says inflation to remain 8pc this year; debt-to-GDP ratio reduced to 81.1pc: Kamyab Pakistan Programme to be launched this month; date for return filing tax year 2021 may be extended
Finance Minister Shaukat Tarin has said the government will start giving targeted subsidies from this month to the weak segments of society on essential commodities including sugar, flour and pulses.
Addressing a news conference along with Minister of State for Information and Broadcasting Farrukh Habib and Special Assistant on Food Security Jamshed Cheema, he said the targeted subsidy will be in the form of cash assistance, which will cover thirty five to forty percent of the population.
The finance minister said the government is also focusing on bolstering agricultural productivity. In the medium to long term, commodity warehouses, cold storages and agricultural malls will be established with the aim to eliminate the role of middlemen and ensure that the farmers get the due price of their products. He said strategic reserves of major commodities are also being built in order to ensure smooth supplies in the market.
The finance minister said that the prices of wheat will decline in the coming days. Tarin said the government has tried its level best not to fully pass on to the masses the impact of international increase in the prices of commodities.
He pointed out, “The sugar prices increased by 48 percent in the world market but we only creased its price by 11 percent. Palm oil saw an increase of fifty percent but we increased the price by 33 to 35 percent. Similarly the prices of crude oil and wheat were not enhanced as per the international market.”
The minister said that increase in prices is an international issue right now. He said that in Pakistan, the Consumer price index (CPI) based inflation stood at 4.8 percent in 2018, which went up to 6.8 percent in 2019 and then 10.74 percent in 2020 and reduced to 8.9 in 2021 and now it will remain at 8 percent during the current fiscal year.
He said, in Pakistan, food inflation in July 2020 was 15.1 percent (urban), 17.8 percent (rural) now reduced to 10.2 percent (urban) and rural 9.1 (rural), showing around 5 percent decline in urban inflation and 7 percent in rural. The minister, however, was of the view that Pakistan is linked to the international market as it has to import wheat, sugar, pulses, ghee, hence, the prices impact the local market.
The finance minister said the government is also giving attention to enhancing the income of the people to enhance their purchasing power.
Tarin said that the Kamyab Pakistan Programme will be launched this month in order to enable the weak segments of the society to earn their livelihoods. He revealed that the International Monetary Fund (IMF) had raised objections to the programme that resulted in a one-month delay.
Tarin said, “The results of our growth strategy are visible and the revenue collection is increasing. We are on the track to achieve five percent growth during the current fiscal year.”
Tarin maintained that the country witnessed an increase in the national debt due to the devaluation of the Pakistani rupee as a result of the IMF deal. He elaborated that at present, the debt stood at Rs39,900 billion. The total debt was Rs25,290 billion in 2018, he said, adding that the debt-to-GDP ratio has been reduced from 85.7 percent in 2020 to 81.1 percent in 2021. The growth in the economy will also help reduce debt to GDP ratio, he added.
The minister while talking about state-owned entities (SOEs) said these were earning net profit of around 204 billion which declined to net loss of Rs286 billion loss in 2018. During 2019, the first year of the PTI government, the loss reduced to Rs143 billion. The minister said that around 10 top loss-making enterprises account for 89 percent of the aggregate losses and therefore attention was focused on these SoEs including PIA, Pakistan Railways, Pakistan Steel Mills, Discos and ZTBL.
He said that a board was being established in the Privatisation Commission to turn around these 10 SOEs. The board would be independent, having world class professionals to stabilise these entities.
He said that the last date for filing income tax returns for the tax year 2021 may be extended as an online portal of the Federal Board of Revenue (FBR) remained disturbed last month. The FBR system was not working for 10 days during the last month, said Tarin. “We will talk to the FBR to extend the date of filing tax returns,” he added.