A dialogue on the budget by the federal government was arranged by Karachi Council on Foreign Relations (KCFR). A large number of CEOs and MDs of industries and businesses, senior govt officials, bureaucrats, journalists, etc, had gathered at a local hotel here. KCFR Chairman Ikram Sehgal welcomed the Advisor on Finance, the Governor State Bank and the FBR Chairman Shabbar Zaidi on the occasion.
The Finance Advisor explained the federal budget to the audience. Dr Abdul Hafeez Sheikh talked about Pakistan's economy and the FY20 budget. He began by saying as to where Pakistan was and where the govt wanted to take it to. He emphasised that a country is known by its people-to-people contact, who sell country's products to others and that remains the responsibility of the private sector. In 70 years of Pak history, unfortunately only a few elected governments completed their tenures. Inconsistency of policies results that we never had a trend of economic growth. We have not been able to do business with others and unable to make international alignments. He shared statistics on current economic situation in Pakistan. He said sadly in the last 5 years Pakistan's export growth rate had been 0 percent. Approaching the IMF was the only solution which had to be adopted. The present govt is paying interest on the loans taken by past governments. Talking about budget, he said everyone has to contribute to achieving set revenue target of Rs 5.5 trillion. He added that exporters have been allowed maximum tax rebates. The government has taken initiatives to control the expenditure as much as it can. Some of the major initiatives taken in this budget were freezing budget in many fields including that of the armed forces, salaries of senior officers and the PM House expenditure has also been reduced by 30 percent. He promised to protect people of Pakistan in every field including provision of health cards to the poorer segment of the society. He added that an amount of Rs 152 billion will be reserved for people of Fata and Gilgit-Baltistan, the most underdeveloped districts of Pakistan. He emphasized on strengthening institutions, especially the State Bank of Pakistan (SBP). He announced that the government will not borrow from the SBP after 30th June 2019. After Hafeez's speech, an interesting Q&A session was held wherein he said as to how the economic reforms would show increase of exports and maximize revenues. As far as tax on agricultural sector was concerned, it was said that, it was the responsibility of the provincial governments. On question regarding agricultural tax, Shabbar Zaidi, Chairman FBR said that income of the middle income group has increased up to Rs 100,000. Answering a question regarding tax exemption on tourism industry, he said the government is trying to minimize the cost of tourism-related equipment and the prime minister is personally focusing on the growth of tourism industry.
State Bank Governor Raza Baqir gave a short brief on the SBP working. He promised that he will do his utmost to improve the economy of Pakistan. He asked Overseas Pakistanis to look for opportunities to serve the country. The SBP's goals are to keep a firm hand on economic situation of Pakistan and modernize the central bank. He said the exchange rate is the tool to control inflation in the country and if the government stops borrowing from the SBP, it will cast a better impact on the economy. He hailed the suggestion of bringing an export policy for all the industries regarding tax exemption, as currently only five industries are availing this tax-free facility.
This was the first public exposure of the Imran Khan regime's economic "A" team. The overwhelming verdict was that the tremendous presentation by Dr Hafeez Shaikh and the Q&A session with Shabbar Zaidi and Dr Reza Baqir made the event an unqualified success in Pakistan's premier economic hub.
The chairman appreciated the govt efforts to bring about a feasible budget under the most stressful conditions and hoped that the govt would take up austerity measures and impose heavy taxation on import of luxury goods.-PR