Politics

Bad Days for Pakistan Over as Country Moves Forward to Embrace Economic Stability: Hafeez Shaikh

ISLAMABAD – On Sunday Dr. Abdul Hafeez Shaikh, (Adviser on Finance, Revenue and Economic Affairs) to PM Khan, stated that Pakistan’s bad days are over, as the country was moving rapidly to embrace economic stability. This is a result of the PTI (Tehreek-e-Inshaf) government’s timely and wise measures.

According to Dr. Shaikh considerable growth occurred in exports, a reduction of 73% regarding the present account deficit, rupee-dollar parity and consistent foreign exchange reserves, were responsible for this. Naveed Kamran Baloch, Finance Secretary and Shabbar Zaidi the FBR’s chairperson were also present.

The stock market showed stability during the last few weeks, whilst the collection of revenue, within the comparable period of 2 months, increased from Rs509-billion to Rs580-billion, showing a 25% growth.

However, imports declined which caused a decrease in revenue, although the collection of domestic revenue soared with 40% within this period. Dr. Shaikh stated, the fiscal deficit stayed under control during the current financial year’s first 2 months. Just Rs24 was recorded in this period.

The inflation rate was below what was expected and may decline further during the next couple of months. The government did not borrow from the SBP (State Bank of Pakistan), one of its measures, for controlling inflation.

No funds were borrowed, like mentioned above, during July & August, whilst the government cleared all the claims of approximately Rs22 billion, of verified sales tax refunds, filed until 2015 of Rs100,000, and about 10,000 citizens benefited from this. An action acclaimed by the business community.

Since August 23, a new system is operational which requires no human intervention, ensuring exporters to receive refunds immediately. This faster system, as per Dr. Shaikh, will refund the previous month’s claims by the 16th, next month.

Non-tax revenues of about Rs1 trillion, according to the government’s expectations will be collected, coming from the sources as below:

Cellular companies’ license renewal Rs0.2 billion

Interest coming from SBP Rs0.3 billion

Privatization from LNG terminal Rs0.3 billion

Finalization expected by December

Power sector reforms:

The circular debt showed a decrease, from Rs38 billion to Rs10 billion on a monthly basis, which would be nil, by December 2020.

About Rs120 billion was saved by the government by beating power theft & other losses.

Stability phase

The PTI government is putting its attention on the foreign sector. After it assumed charge, an agreement was reached with the IMF (International Monetary Fund), which was broadly applauded.

Furthermore, it engaged the ADB (Asian Development Bank) and the World Bank, according to Dr. Shaikh.

The budget addressed the following sectors with special attention:

  • Society’s vulnerable segments
  • Private sector
  • Pakistan’s ignored regions
  • Confidence in exceeding growth target

By taking stringent measures, the government decreased its expenses by Rs50 billion, in addition to freezing military disbursement as well as remunerating high officials.

  • Privatization process

Dr. Shaikh stated the government took the decision to transfer public organizations to its private sector.

About 20 public-owned enterprises were prioritized on a list for privatization. Dr. Shaikh added when he was the minister of privatization during 2006, 34 SOE’s were privatized by the government in power.

The government was still considering to privatize profitable organizations, which include the NBP (National Bank of Pakistan) as well as the State Life Insurance Corporation.

Dr. Shaikh expressed the government’s confidence in exceeding the 2.4% growth target set for the 2019 – 2020 financial year, as Pakistan’s economy is currently moving forward, after it gained stability during the previous year on the foreign front.

Agricultural sector

The government was particularly focusing on developing the agricultural sector, whilst the expectation is that this sector will show a 3% growth rate during this fiscal year.

The former regimes neglected this sector, which had shown a 0.8% negative growth rate for the period 2013 to 2018.

  • Visiting Pakistan: IMF

Dr. Shaikh appealed to the people to stay calm during this difficult time, as the government must take really tough and long-term decisions for its citizens’ improvement.

In answering a question Dr. Shaikh announced that the visit of an IMF delegation can be seen as a routine matter. The two sides reached an agreement which stated that such a delegation will visit Islamabad on a quarterly basis to monitor the economic performance.

The FBR chairman, Zaidi in responding to another question regarding tax filers, stated the amount of taxpayers had risen from 1.9 million during the previous year to this year’s 2.5 million, an increase of 0.6 million filers.

According to Zaidi, a mobile application was launched by the FBR, enabling taxpayers to file their tax returns easily when paying their taxes.

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