The spokesman added: "It is true that the opposition parties in the National Assembly boycotted and did not participate in the budget discussions.
"The fact of the matter is that every effort was made by the treasury benches as well as by the Speaker to bring opposition back into the National Assembly and listen to their criticism and suggestions related to the budget. Unfortunately, the opposition remained stubborn and did not return to the National Assembly. Moreover, the cut motions were also raised but the opposition did not discuss the motion and continue the boycott. The author has wrongly concluded from the opposition's boycott that the government is indifferent to democratic norms and does not allow debate and exchange of ideas in the parliament.
"In the budget closing speech, the Finance Minister appreciated the participation of Senate members which is dominated by the opposition and has representation from all major political parties. The recommendations made by the Senate were fairly representative and accommodated to the maximum. The author should have appreciated this gesture of the government.
"It is outrightly wrong that the federal government tried to appease any particular group. The Finance Minister's closing remarks appear to be completely misunderstood. The fact is that the government was blamed by some corners that during the budget making process, the federal government has not held consultation with various stakeholders. To clarify its position and refute the allegations, the Finance Minister mentioned in his closing remarks in the National Assembly that the federal government not only held consultations during the budget making process rather it continued even after budget presentation in the National Assembly. Therefore, as a result of those consultations, some amendments were made in the money bill. Therefore, those amendments were not meant to appease any group.
"Similarly, the author's assertions related to Council of Common Interest (CCI) and National Finance Commission (NFC) are unfounded and against the facts. CCI meetings are convened regularly and important agenda items brought by the federal and provincial governments are discussed in an open and cordial atmosphere.
"As regards NFC, it is mandatory under Article 160 of the Constitution of Islamic Republic of Pakistan that a new NFC is constituted after an interval not exceeding 5 years. Pursuant to the Constitutional provisions, the government had set up a new NFC (9th NFC) on April 24, 2015, even before the expiry of the 8th NFC. It is an ongoing process and not been closed. The federal government has given its position while response from the provincial government is awaited.
"With regard to public debt, it is to be noted that commercial loans are only 3.8 percent of external public debt while the largest component is the multilateral debt and bilateral debt, constituting around 87 percent of the external debt as at end March, 2017. The loans from multilateral and bilateral development partners are aimed at removing structural bottlenecks from Pakistan's economy.
"These concessional loans are primarily utilized towards implementing structural reforms in the areas of taxation, doing businesses, trade facilitation, education and promotion of small and medium enterprises (SMEs). It may also be highlighted that these loans are also dominated by long term maturities and, therefore, do not add much to the country's debt servicing burden. Furthermore, these concessional external loans have been used to retire relatively more expensive domestic debt.
"The average cost of the external loans obtained by present government comes to around 3 percent which is significantly lower than the domestic financing cost even after a margin of capital loss due to exchange rate depreciation is added. Therefore, cost of the external debt contracted by present government is not only economical but is also dominated by long term funding.
"The international investment agencies generally base their assessment on international ratings. Since there is an improvement in our ratings, the government successfully issued 5-year US$ 1,000 million Sukuk at the rate of 5.5 percent in October 2016, which was the lowest rate ever achieved by the government in the international capital market. Moreover, drawing comparison of Pakistan with the western economies is not meaningful on the ground that Pakistan has a more challenging security environment and is paying a heavy price both in cash and kind against extremism. The rate finalized on the last concluded international Sukuk was better than sovereign issuance of bonds by both Bahrain and Sri Lanka, the credit ratings of which were higher than Pakistan. This highlights investors' confidence in country's economic indicators and structural reforms undertaken by the government.
"In order to remove the anomalies and distortions in the interest rates of National Savings Schemes, their rates were aligned with the wholesales domestic debt instruments yields. This has reduced the possibility of interest rate arbitrage. Therefore, contentions of the editorial with regards to national savings schemes interest rates are not supported by the facts.
"The federal government highly respects difference of opinion and considers that the participation of opposition in the National Assembly may have added value but it could not happen. Again the author has leveled baseless allegations that the Finance Ministry is manipulating data and ignoring the serious issues confronted by the economy. It appears that the author has completely subsided government achievements during the past four years as well as the praise it has earned from all major international institutions eg, the IMF, World Bank, S&P, Moody's and Fitch, etc. The author would do well to go through those reports."
Copyright Business Recorder, 2017