ISLAMABAD: Federal Minister for Finance and Revenue, Shaukat Tarin Thursday said that owing to prudent and timely policies adopted by the government, Pakistan achieved remarkable gross domestic product (GDP) growth of 3.94 percent during the ongoing fiscal year (2020-21), amid hostile Covid-19 situation, which had hit hard the world economies.
Addressing the launching ceremony of Pakistan Economic Survey for the fiscal year 2020-21, the minister said there were 2.1 percent growth projections for the current fiscal year, while the world financial institutions including the World Bank and International Monetary Fund (IMF) had forecast even lower growth.
However, the minister added, due to the timely interventions and prudent policies by the government, the GDP witnessed remarkable growth of 3.94 percent.
Minister for Economic Affairs Makhdoom Khusro Bakhtyar, Advisor to the Prime Minister on Commerce Abdul Razak Dawood, Special Assistant to the Prime Minister on Poverty Alleviation and Social Safety net Sania Nishter, and Special Assistant to the Prime Minister on Finance and Revenue Dr Waqar Masood were also present on the occasion.
He said the government had provided incentives to manufacturing sector and facilitated businesses by providing incentives in gas and electricity besides making interventions in agriculture sector, which helped positive development towards growth.
He said the Large Scale Manufacturing (LSM) witnessed growth of 9 percent, while agriculture sector also grew by 2.77 percent, whereas the overseas Pakistani workers’ remittances had crossed $26 billion and are expected to go up to $30 billion. He said the government had tackled the Covid-19 pandemic in a wise manner, due to which, Pakistan had been witnessing growth at a time when the world economies were facing difficulties.
However, the minister said Pakistan became net importer of food items including wheat, sugar, palm oil, and pulses which had put burden on current account balance, however added that the country’s exports were witnessing growth.
He said although inflation had gone up, but as compared to other world countries it was comparatively low in Pakistan adding that the government was making all out efforts to bring it down and provide relief to the common people.
Finance Minister, Shaukat Tarin informed that COVID-19 Pandemic had badly hit the working population as the number of working people brought down from 57.74 million to 35 million, depriving over 20 million from their jobs and livelihood.
However, he said policies introduced by the prime minister to reduce the after-effects of the pandemic, the number of working population started to enhance and reached again up to 50 million by October 2020, hence helped in regaining the economic activity in the country.
In order to sustain the local economy, he said the government had taken timely decisions and announced special incentives for different sectors of national economy including manufacturing, construction and agriculture sector.
Due to incentives of the government, large scale manufacturing industry grew by 9 percent, agriculture sector witnessed 2.77 percent growth while the major crops such as wheat, rice, sugarcane and maize production touched the higher numbers and bumper crops were produced during the season.
Meanwhile, worker remittances observed unprecedented growth and reached to $26 billion, which was showing the confidence of overseas Pakistani on the leadership of Prime Minister Imran Khan, he remarked.
The finance minister said the increasing trend in foreign remittances had also helped overcoming the negative impacts of current account deficit, which was swelled mainly due to increase in the imports of food commodities including wheat, sugar, edible oil and others.
Shaukat Tarin said foreign exchange reserves with the State Bank of Pakistan also increased from $7 billion to over $16 billion, while $1 billion was deposited through ‘Roshan Digital Account’. He said the government had striven to fulfill the requirement of Financial Action Task Force.
He expressed optimism on increasing revenue collection of Federal Board of Revenue , saying that it touched Rs4.2 trillion during last 11 months, which was higher than 18 percent as compared to the collection of corresponding period of last year.
FBR collection witnessed about 18 percent growth on year on year basis and posted record collection of around $4.2 trillion in first 11 months of current fiscal year, he said adding that revenue collection witnessed about 50 to 60 percent growth on month-on-month basis in last four months which showed how the government was gaining momentum in revenue collection. “Keeping in view the rising trend, we have fixed the next year’s revenue target at Rs5.8 trillion,” he added.
For the first time in the 12 years, the primary balance was in surplus, he said adding that food inflation was high and affecting common man in the country but it was correlated with some international fluctuation in food commodity market. He said Pakistan was importing wheat, sugar, pulses and edible oil and prices of these commodities in international market pumped manifold, adding that government was bearing the shocks and was not passing the impact on masses directly.
In order to bring stability in daily used commodities as well as controlling rising inflation, he said the government in its current budget was paying special attention on agriculture sector to enhance output of agriculture produces in the country.
To discourage artificial affect of increasing pricing of food commodities, he said that measures would be taken to improve local prices mechanism and marketing facilities, besides setting up the storage facilities to break the nexuses of hoarders and profiteers.
About the debt, Train said debt payment increased from Rs1,500 to Rs3,000 as on total debt was stood at Rs 31 trillion out of which Rs 25 trillion was local debt and Rs12.5 trillion was foreign debt, adding that in 2020-21, an amount of Rs1.7 trillion was increased in the public debts. He said increase in debt during current financial was half compared to the last year.
To a question, the minister added that the IMF wanted us to raise power tariffs besides increasing Rs150 billion worth of personal income tax in the upcoming budget. “We however have conveyed to the IMF not to put more burden on the salaried as well as the poor people,” he said adding that the IMF wanted to bring stability in the economy first and then move towards the growth.
“We also want stability but on the same time we want to move towards higher growth rate so that to feed the growing number of youth by providing them jobs,” he added. With respect to circular debt and capacity payments issues, the minister said this issue was very complex and may take some time of around 6,7 years to be resolved.
The minister said China Pakistan Economic Corridor (CPEC) was a platform from which the government would try to take full benefit.He said the government had asked China to relocate its industry to the ‘Special Economic Zones’ under CPEC in Pakistan which would help increase exports from the country.
He said the government had to raise foreign exchange reserves by pushing exports, remittances and Foreign Direct Investment (FDI) to higher growth. The minister pointed out that the next budget would be totally pro poor budget as Prime Minister Imran Khan had specifically directed to bring such policies that help poor come out of their crisis.
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