PM seeks maximum relief for masses in budget

ISLAMABAD: While pointing out and appreciating the fact that key economic indicators have improved during the last two years, Prime Minister Nawaz Sharif has impressed upon his financial managers to focus on providing maximum relief to the common man in budget-making for the upcoming fiscal year so that they also reap the benefits of stability in the country’s economy.
The prime minister was addressing the federal cabinet meeting here at the Prime Minister’s Office (PMO) on Tuesday. The cabinet approved the budget strategy paper 2015-16. The meeting chaired by the prime minister also discussed the state of the economy and proposed targets for the next fiscal year. The budget strategy paper approved provides guidelines for further strengthening the national economy, streamlining the tax system to broaden its base and ensuring provision of maximum relief to the common man.
Addressing the meeting, the prime minister said the next budget should focus on providing maximum relief to the people. He appreciated the fact that key economic indicators had improved during the last two years. The prime minister said efforts were under way to reduce the tax rates and duties and broaden the tax base to increase the revenue collection. He said this would encourage people to pay their taxes willingly.
The cabinet meeting took note that while benefits of mega projects in the pipeline will start unfolding in the next five to 10 years, immediate measures were needed to strengthen the benefits of recent stabilisation measures with the help of the private sector. The prime minister directed the Ministry of Commerce to gear up efforts to increase the country’s exports. Minister for Finance Ishaq Dar briefed the cabinet on the performance of the economy and efforts being made to strengthen it.
The federal cabinet that had its first meeting in about two months was attended by federal ministers, state ministers, advisers to the PM and senior officials including Secretary to the PM Javaid Aslam, Additional Secretary Fawad Hasan Fawad and Secretary Cabinet Raja Hasan Abbas.
Nawaz congratulated Ishaq Dar and his team on achieving the high growth and economic stability in the country. The prime minister lauded the efforts of the expatriate Pakistanis for sending their remittances to Pakistan. He directed that steps be taken to facilitate the overseas Pakistanis to send remittances through banking channels. The premier expressed satisfaction that reduction in policy rate from 8 percent to 7 percent will help encourage investment in the country. The prime minister also directed the Ministry of Commerce to enhance efforts to increase the exports.
The prime minister directed that the overall prosperity of the masses should be the top priority in the next budget and said that the current trend of GDP growth should continue to increase the employment opportunities for the youth. “We must address the issues of agriculture and manufacturing sectors to boost growth and work day in and day out to further strengthen the country’s economy,” he said.
The cabinet after detailed discussion gave approval to budget strategy paper 2015-16.
Earlier, Ishaq Dar and Secretary Finance Division Dr Waqar Masood Khan gave a detailed presentation to the cabinet members on strategy being followed in formulation of proposals for the next budget. The finance minister said the government was concentrating on major policy initiatives that were aimed at consolidating stability and spurring growth.
“When we took the reigns of the government, the economy was weak and fragile and the growth rate averaged less than 3 percent and inflation had averaged around 12 percent. The circular debt was crippling the power sector and economy. The fiscal deficit was hovering around 8.8 percent and there were predictions of default. However, due to economic policies of the government, the economy is now performing well,” Dar said.
He said that in the medium term, the government plans to gradually increase the GDP to around 7 percent and contain inflation to single digit i.e. less than 6 percent. “We intend to bring down the fiscal deficit to 4 percent and increase the foreign exchange reserves to $20 billion. We have also set the target of increasing the tax-GDP Ratio to 13% and increase exports to $32 billion,” he said.
He briefed the cabinet that the FBR tax collection was increased from Rs1,946 billion in 2012-13 to Rs2,266 billion in 2013-14 and during the last 10 months, the tax collection has reached Rs1,968 billion with an increase of 12.8 percent from the corresponding period of the last financial year. “There has been an increase of 200,000 taxpayers in the last two years,” he informed.
The minister said that in the first year, the government had achieved the GDP growth rate of 4.02 percent and during the current year 4.24 percent will be achieved, which is the highest in the last seven years. “We have also brought down the budget deficit from 8.2 percent in 2012-13 to 5 percent during the current year. Overseas remittances have also reached $14.8 billion during the period of July-April of the current fiscal year showing a growth of 16.06 percent.”
Dar stated that the foreign exchange reserves had also risen to $17.5 billion on May 25, 2015.
He informed the cabinet that this budget will bring encouraging incentives for the betterment of the overall economy and for generation of employment opportunities. The cabinet was informed that the budget will acknowledge development-oriented approach of the PML-N government. “We have tried to incorporate suggestions from different sections of the economy in this budget and this is the most appropriate time to boost investment in areas which have the potential to grow at a high rate when the interest rates are historically low and we have more space available for encouraging development works,” he added.