For new govt, economy should come first

KARACHI: The new government should give first priority to issuing a policy statement on the economy just after taking over reins of the country. And if the statement is powerful enough, it will instil fresh confidence into the business community, encouraging more investment in the economy, suggests Dr Ishrat Husain, Dean and Director of the Institute of Business Administration (IBA).

Husain was speaking at a pre-budget seminar jointly organised by the Karachi Chamber of Commerce and Industry (KCCI) and the Association of Chartered Certified Accountants (ACCA) Pakistan here on Monday.

“Today, one of the biggest problems of Pakistan is circular debt because of which power crisis has become uncontrollable,” he said. “So the new government has to handle it immediately after coming to power and for that it should stop subsidising electricity who can afford it.”

Elaborating, he said out of 20 million electricity consumers in Pakistan, only 1 million deserve subsidy. “For instance, if you produce electricity at a cost of Rs13 per unit and recover Rs8 or 9, it just does not make economic sense. If you continue subsidising those who can afford, you will not be able to sustain this system,” he added.

After the 18th Constitution Amendment, Husain stressed that provinces should take responsibility and generate significant revenues as it would bring down fiscal deficit of the country. “Provinces, especially Sindh and Punjab, need to improve their revenue base,” he suggested.

Discussing the role of the Federal Board of Revenue (FBR), he asked the FBR to stop issuing Statutory Regulatory Orders (SROs), which is the mandate of parliament and not of the FBR. “Unless the FBR stops issuing SROs, Pakistan cannot fully systemise its tax system,” he added.

Husain was of the view that the new government should give priority in fund allocation to two sectors – power and education – and complete projects associated with these areas within a year or two.

Earlier, he said, the governments had been misusing the Public Sector Development Programme (PSDP), leading to years of delay in executing projects.

About government borrowing from the central bank and commercial banks, he said, “I am very much against government’s excessive borrowing from the central bank as it inflates inflation. On the other hand, commercial banks make easy money by lending to the government that creates shortage of liquidity for the private sector.”

In an apparent reference to rampant smuggling, he stressed that the country could collect much more revenues if it went for reducing tax rates for different sectors. (Courtesy: Tribune)

One thought on “For new govt, economy should come first

  1. DEAR MEDIA TEAM OF PMLN

    I am the supporter PMLN of NA121 nd PP149.

    It is to inform you that 70% of PTI VOTERS have still no confidence to giving vote to PTI. It is very kindly requested that we should have launch a compaign against PTI. We should inform people about their defaults like irfan siddique did in his column dated: so that we can handle this situation. I only need to have some allegations on PTI and imran with proofs( if avaible). I am very much confident that i can change the mind of numerous voters of PTI.
    There is only some work to do in 149 and PTI is not a big problem. The main work to do is in PP 148 agains PTI.
    in 149 SHOAIB khan is working very hard and going to support HAMAD AZHAR for NA vote in return of PP 149 vote for him.

    waiting for your kind response.

    Malik Altaf Hussain Awan
    0322-4664300
    0300-4102106
    supporter PMLN
    NA121 PP 149

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