Islamabad July 16 2022: Minister for Finance and Revenue Miftah Ismail here on Saturday reiterated the firm commitment of the government to bring economic stability, reduce inflation, end power load shedding and build foreign exchange reserves for achieving sustainable, inclusive economic growth and social prosperity in the country.
Addressing a press conference along with Minister for Information and Broadcasting Marriyum Aurangzeb, Finance Minister reaffirmed the government’s resolve to pass on all the benefits gained through declining of petroleum prices in international market, besides taking all possible steps to protect the most vulnerable segments of the society through strengthening social safety nets.
The minister said that tough and unpopular decision taken by the coalition government had helped the country to avert from default, however, he said that strict adherence of fiscal and financial discipline still vital to put the economy on right direction of fast track, sustainable economic development and attaining social prosperity.
Soon after receding the price of petroleum products in international market, he said the government had decided to pass on all its benefits to facilitate the common man in the country and it would be continued passing on the relief to address the rising inflationary pressure.
Meanwhile, he said that after the reduction in petroleum prices in local markets, Pakistan Railways and Pakistan International Airline had also announced to reduce their fairs, adding that provincial governments were also directed to take measures to bring down fairs in inter-city and intra-city to facilitate the passengers.
About the depreciation of Pak-Rupee against greenback, the minister expressed the hope that it would strengthen soon after the finalization of agreement with International Monetary Fund by current month, besides receiving about $ 4 billion from the some brotherly and friendly countries.
The minister said that it was also expected to receive about $6 billion by the multi-lateral lending institutions including Asian development bank, World Bank and Asian Infrastructure Development Bank and others, adding that it would also help to bring the stability in value of rupee.
Criticizing the mismanagement and bad governance of Imran Khan-led government, he said that previous government was not only incapable but it was also inefficient and pushed the country on the verge of economic default and social distraction.
He said that during first 3 years of PTI’s government, budget deficit reached to historic high till Rs 3,408 billion as against Rs1,664 billion of total deficit of PML-N’s previous five years tenure.
He said that federal development budget cut down from Rs 900 billion to Rs 550 billion that had slowed down the phase of infrastructure development, where as national debt witnessed about 78% increase and it swelled to all time high and reached to Rs44,366 billion.
The net debt and liabilities grew by 78% during first three years of PTI government and it was increased from Rs23,665 billion to Rs53,544 billion, he said adding that due to their inefficiencies, country witnessed historic high deficits including budget and free fall of rupee against dollar.
Finance Minister further said that tax to GDP ration also came down and reached to 9% of GDP according to new GDP, adding that the PML-N government had left the the revenue collection ration 11% of GDP.
Besides, the PTI government had left historic high trade deficit during its last year of rule that comprising over $48 billion, besides current account deficit was recorded at $17 billion, which again was the highest.
He said that delay in decision making process, poor commitments with international lending institution, particularly with IMF also proved disastrous for national economy and pushed it to the verge of default.
He said that due to no-rationalization of POL prices as per according to international market, the government was facing Rs120 billion as losses on petroleum products in term of subsidy and Rs 27 billion on electricity tariff.
Besides, he said that the government had also paid an amount of Rs1,070 billion during last year, adding, it provided Rs101 billion subsidy on gas, whereas the circular debt increased from Rs1,100 billion to Rs2,500 billion, which was highest in the history.
Miftah Ismail further informed that foreign debts and liabilities increased from 33% to 40 % and debt servicing increased from Rs1,500 billion to Rs3,144 billion.
He said that due to cognizance of aggravating economic situation Prime Minister Shehbaz Sharif directed to resume negotiation with IMF and took tough decision including to increase the prices of petroleum products, besides taking measures to controlling twin deficits and putting the country on track of sustainable development.
Highlighting the salient futures and relief measures introduced by the government, minister said that government had attached top priority with agriculture sector development and exports promotion and introduced special measures for their development.
All the agriculture sector inputs including tractors, fertilizers, seeds of different crops exempted from the sales tax , adding that government would provide special incentives for wheat growers in order to enhance out put of wheat get rid from its imports, he added.
He said that under the special directives of Prime Minister, Federal Board of Revenue was asked to pay all outstanding refunds of exporters and DLTL in order to provide them financial space to enhance exports and develop the local industrial sector.
In budget 2022-23. the government has fixed revenue collection targets at Rs7,470 billion, he said adding that non-revenue collection was targeted at Rs1,935 billion, which not only would be achieved but also surpassed.
Despite the tough fiscal position, he said that government enhanced its budgetary allocation of Benazir Income Supports Program from Rs250 billion to Rs364 billion, adding that over 9 million people were taking benefit from the program and addition 1.1 million families were provided cash incentives.
Replaying to a question, the minister said that interest free loans would be provided to youth, besides promoting IT sector, adding that the government had also provided Rs109 billion for higher education commission, whereas Rs5 billion allocated for the scholarship of the students from Balochsitan.
