He shared the Medium-Term Plan 2017-18 as the way forward. The presentation refrained from using the actual title of the programme for the vulnerable ie Benazir Income Support Programme and instead titled it Income Support Programme for the Vulnerable claiming that the monthly stipend was raised during the tenure of the PML-N government from Rs 1000 in 2012-13 to Rs 1200 in 2013-14 to Rs 1500 in the current year.
Another visible gain was the 64.22 percent increase in the KSE 100 index from 11 May 2013 to 25 May 2015. The presentation highlighted Pakistan's return to the international market and noted the (i) successful floatation of Eurobonds - US $2 billion - and (ii) successful flotation of Sukuk bond - US $1 billion. The Eurobond will save Rs 9.06 billion per year in debt servicing/financial cost while sukuk will save Rs 5.1 billion annually.
The presentation notes that tax to GDP ratio declined to 7.5% up to March 2015 from 10.2 percent in 2013-14 and 9.8% during the last year of the PPP-led coalition government. FBR revenue collection was Rs 1936 billion in 2012-13, Rs 2266 billion in 2013-14, and Rs 1968.8 billion (up to April 2015) ie 12.8 percent increase. FBR increased the number of taxpayers by 100,000 in FY 2013-14 and another increase of 100,000 is targeted by end June 2015 and the concessionary regime would be eliminated. The presentation adds key International Monetary Fund (IMF) conditions.
According to the Finance Minister, GDP will grow gradually to around 7% in 2017-18 whereas inflation will remain in a single digit ie less than 8%. Fiscal deficit will be brought down to 4% and foreign exchange reserves will reach $20 billion. Investment to GDP ratio will be 20%, public debt would be brought down to below 60% of GDP and tax to GDP ratio will be raised to 13%-15%.
Exports will be increased to $32 billion and Foreign Direct Investment will be increased to over $5 billion. FDI inflows were $1.5 billion in 2012-13, $4.4 billion in 2013-14 and $2.6 billion up to March 2014-15(2014-15). Expenditure on education and health will be around 4% of GDP, with key social indicators equal or better than regional countries' the goal is to lower fiscal deficit to 3.5% by FY 2017-18.
According to the presentation, average growth rate in 2008-13 was 3%. For the first time in six years, GDP growth rate exceeded 4% (4.02% in FY 2013-14). Growth rate of 4.24% projected for FY 2014-15 is the highest in seven years. The presentation further reveals agriculture credit in 2012-13 was Rs 336.2 billion, Rs 389.7 billion in 2013-14 and Rs 327.01 billion till March 2015 against the target of Rs 500 billion for 2014-15.
However, Finance Minister did not disclose the figures of PSDP released during the first 9 months of current fiscal year against the budgeted allocation of Rs 525 billion. Export refinance facility was 9.4 percent till June 30, 2014, 7.5 percent as on July 1, 2014 and 6 percent as on February 2015.
The increase in trade deficit this year till April was by 0.72 percent with a relatively small decrease of 1.61 percent in imports (in spite of the significant reduction in the international oil price) indicating a decline in exports. Per capita income was $1340 in 2012-13, $1386 in 2013-14 and $1513 (provisional) in the current year. Public debt percentage of GDP was 63.9 percent in 2012-13, 62.8 percent in 20013-14 and 61.8 percent up to March 2015. Tax to GDP ratio was 9.8 percent in 2012-13, 10.2 percent in 2013-14 and 7.5 percent in 2014-15(up to March 2015).
The government managed to obtain financing for Dasu Hydropower Project while information for exploring financing options for Diamer-Bhasha dam was organized in October 2014 in Washington. Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM) and Railways have been identified for restructuring and public- private strategic partnership. Three Discos (Iesco, Lesco, and Fesco), NPCC and Northern Power Generation Company Limited (NGGCL) are on top of priority list for privatisation.
OGDCL transaction was cancelled due to political disturbances and a falling trend in international oil price (approximate loss of $850 million). The government has already sold 5 percent stake in PPL and a 20 percent stake in UBL. Divestment of UBL has generated ($400 million), ABL (Rs 15 billion), PPL ($155 million) and HBL ($1 billion). Briefing on debt management, the presentation notes that the tenor of domestic debt has shifted from being short term debt to medium and long term debt. Also T-bills' listing has been introduced on stock exchange to attract retail investors.