ISLAMABAD
Finance Minister Miftah Ismail Saturday said the target of next year’s budget is fiscal consolidation and provision of relief to the masses.
Addressing the post budget press conference in Islamabad today along with Minister for Information and Broadcasting Marriyum Aurengzab, Minister of State for Finance Aisha Ghaus Pasha and FBR Chairman Asim Ahmad, he said that the budget of Benazir Income Support Program (BISP) has been increased by thirty-five to forty percent. He said that flour, sugar and ghee will be provided on discounted rates at Utility Stores Corporation throughout the year.
Miftah Ismail has heralded more difficult times ahead as Pakistan economy is in dire straits and the International Monetary Fund is not happy with us. After extending his gratitude to the economic team who toiled hard for the preparation of budget document, the finance minister lashed out at the previous government for leaving economy in the tailspin.
He said that Pakistan was passing through a very difficult time. “That’s why we had no other option but to take difficult decisions to put the country out of economic morass,” he said adding that we were facing a budget deficit to the tune of Rs4.59 trillion. .
He said he did not foresee that oil prices would come down adding that ‘edible oil has become so expensive that we could not afford it’. He said previous government failed to purchase LNG on time and the delay added to an increase in the circular debt. He said at present country was facing Rs500 billion circular debt. He said Rs1100 billion subsidy was given on electricity qwhich means government is giving Rs16 per unit subsidy on electricity tariff.
The finance minister said that the new government has withdrawn subsidy on power and electricity. He stated that the system which has been devised to determine the electricity prices is flawed. He pointed to drawbacks in electricity transmission and distribution system. If we do not rectify them, then our economy will have to bear so much pressure that it will eventually be sagged, he warned.
Miftah informed that we are facing Rs1400 billion circular debt in gas sector. He accused the previous rulers of selling LNG at $2 while the government was purchasing it for $20.
The finance minister, however, said that government would not shut down any factory. If the previous government had reached an agreement with any business entity for providing it gas at subsidized rate, the new government would also honour the agreement, he vowed.
He also pointed out that in Sui Southern Gas, the Unaccounted For Gas (UFG) is 20%. We don’t know whether the gas is being stolen or it is just vanishing into thin air, he wondered. Miftah was of the view that ‘we need to bring in structural reforms to revive our economy’. “We were far ahead Bangladesh in 1990s but where our economy has reached now. If our economy becomes like Sri Lanka, people would not forgive us.”
He said he only wanted people’s cooperation. “I’m not taking money home by increasing prices of petrol,” he said adding that he just has abolished subsidy on gas and power sector. He said expenditures are increasing by 3%. The finance minister said that former prime minister Imran Khan hoodwinked the entire nation by artificially not raising the POL and electricity prices. Country faced historic economic deficit during previous regime, he added.
He said the International Monetary Fund was not happy with Pakistan. But we will talk with them. At this point in time, we have no other option but to take hard decisions and the budget is also part of this series, he elaborated.
The federal minister proclaimed that we have to tighten our fiscal affairs and reduce our expenditures. We are not utilizing even 5% of our resources. He said that government has introduced a fixed tax scheme for traders.
FBR Chairman Asim Ahmad said that the government would bring 2.5 million traders in this scheme. State Minister for Finance Ayesha Ghous Pasha said that the difficult economic decisions were taken to steer the country out of crisis. Government is trying its best to put less and less burden on masses. She said that the government has increased funds for the social safety network for downtrodden segment of society. Concessions have been provided to the agriculture sector in order to boost yield at the local level so that inflation could be brought down.
Answering a question, Finance Minister Miftah said government would bring into tax net more than 25,000 retailers by imposing minimal tax on them. He said the things which have been left in the budget, they would be included later. He said there would be small changes in budget in next 15 days.
On POL prices, the federal minister said it does not look like that the prices would decrease internationally. When we impose the PDL tax then it would definitely raise inflation in the country. If government hikes petrol prices, this money would be spent on people. He said government wanted rich people to contribute more to save the country from economic disaster.
Miftah said that the Shehbaz Sharif-led government wanted to take companies to privatization. He said that soon the work would be complete on companies which have been marked ‘ready for sale’ by the
privatization commission.
The Minister clarified that the salary raise of fifteen percent has been
given on the pay scales of 2017 and then the ad hoc reliefs will be
merged. DNA
