Ameer JI Pakistan
The govt claims for achievement of economic stability again and again. But the facts do not confirm these claims. The debt of our national economy is consistently increasing. The public debt was 22.5 billion rupees in the end of June 2016. Out of which 2.8 billion rupees was non-govt debt. It means the loans that have been taken from public sector enterprises and commercial banks. The loan of government was Rs 19.7 billion, out of which 13.6 billion was the internal loan and 6.1 billion was external loan. It is the 23.2 percent of the GDP. Now public debt is more than Rs 24 billion. The govt has taken the foreign loan of 24 billion dollars from 2013-2016. 1.15 billion were paid as an interest in the first three months of the current fiscal year. The total debt is nearly 66 percent of the GDP.
According to the Fiscal Responsibility and Debt Limitation Act, the debt cannot be more than the 60 percent of the GDP. The economic stability is in great danger due to spending a lot of money on payment of loans. Less amount is available for social sector (education, health) and infrastructure. Now every Pakistani is liable to pay the debt of Rs 100,000. The internal income is low but expenditures are high. Exports are less than imports in foreign trade. The revenue is approximately 1.5 billion lower than the expenditures. While imports are $ 20 billion more than the exports. Govt has taken few steps to meet the challenge. The most important is to take loans. The 47 percent of the revenue is spent on the payments of the loans. The total debt is almost 600 percent of the annual revenue.
In the first 10 months of the recent fiscal year, the current account deficit is $19.936 million. It is 2.7 percent of the GDP. A meeting of National Economic Forum was presided over by the PM in the previous week. The deficit of the current account was estimated at 10.4 billion for the year 2017-2018. Similarly, in the current fiscal year, the FBR has collected the revenue which is Rs 157 billion less than its target (Rs 3.6 billion annually). It is an estimation that this deficit will be Rs 300 billion in the end of the 2017. Loans are taken to cover these deficits. Then more loans are taken to pay these loans. The money which was sent by oversees Pakistanis was sufficient to a certain level to cover both the deficits till the previous year. But in this fiscal year it is reducing continuously. It is 3 percent less than the last year. The foreign investment serves the purpose to some extent in this regard. But CPEC is the only foreign investment that can be mentioned. The single solution is to increase exports so that the revenue can be generated. The PM announced a package of Rs 180 billion in January 2017 to enhance exports. But it proved fruitless. The reduction of 3.9 percent in exports was noted from July 2016 to March 2017. In spite of all Development Programme, govt wants to take it up to $1 billion in its 5th budget because of the coming elections. Govt has a programme of giving Rs 50 million each to its elected members, to bear expenses of elections easily. It will increase national debts. Govt should bring the basic changes in the tax system. The rich can be brought in the tax net. Resultantly, Govt will have more resources for the poor. It is admitted that direct tax system can turn the flow of resources towards the less developed areas and people. But in our country the indirect tax combined with withholding is collected. This amount is 66 percent higher than the amount of the direct tax collection. A large number of rich people are not in the tax net. Almost more than 60 million people who keep mobile phones pay 14 percent income tax in advance. Not considering that their annual is 400,000 or not. Similarly, they pay 19.5 percent sales tax. 1,800,000 people travel abroad frequently. Nearly 700,000 Pakistanis have more than one bank accounts. More than 100,000 Pakistanis live in developed areas. They have more than 80,000 luxury cars. 90,000 people pay heavy utility bills. There are more than 200,000 professionals (doctors, engineers, lawyers, CAs). But majority of them do not submit tax returns. 2,500,000 people got NTN number of income tax. Less than 1,000,000 people submitted tax returns. The real problem is that the upper class does not pay income tax according to their real income. The govts have been failed constantly in this connection. The present Govt is following the same footsteps.
Very little resources are allocated for the social sector (education, health) as comparison with other countries of the region. For example, only 2.2 to 1.8 percent of the GDP was spent on the education in the years 2011-2015. The present govt is spending huge amount on the construction of motorways, under passes, metro bus, highways and orange train project. But education and health sectors have never been its priority in spite of all its claims. The priorities of the govt at regional level are based on total injustice. 58 percent of the development budget of the districts has been spent only on Lahore. 3% has been allocated for Multan. Less than 3 percent has been allocated for all other districts. There is a great inequality in the division of income at regional level and among different sectors due to these policies. 70% population of the country is associated with agriculture directly or indirectly. The share of agriculture sector in the national income is 21 percent. Nearly half of the total labour force (44 percent) is working in this sector. The agricultural products are the 66 percent of our total exports. In spite of all these facts, the sector of agriculture has never been in the priorities of any govt since 1947. This sector is facing the serious problems of low production, lack of water, no access and awareness of modern technology, seasonal changes, and increase in cost of production and inequality in international market. Following measures should be introduced for improvement in agriculture sector. Special attention should be paid on the research and development, so that seeds on cheap rates can be provided to the farmers. The problem of the shortage of water should be solved. Sales tax on agricultural items used in the production, should be abolished so that the cost of production can be reduced. The farmers should be made aware of the modern technology to adjust themselves according to the seasonal changes. High level of agricultural production should be achieved and exported. High prices of important crops should be fixed and paid to farmers.
It is the need of the hour that govt cut short its current expenditures. The prices of gas and electricity should be lessened to increase the exports. Low cost of production can be helpful in this regard. Foreign markets should be explored and items should be prepared according to the demands of the market. We should not depend on the traditional trends but adopt the new fashion. Items should be prepared according to the taste of the people in abroad. The crop of cotton should be focused especially in agriculture sector. Its production is decreasing day by day. It is being imported. The export of fruits should be increased by improving the standard of mangoes, guavas, oranges and vegetables. We should depend on national resources instead of loans. Unnecessary imports should be discouraged. The refunds of exporters should not be blocked in order to give impression of an increase in revenue. The legal refund should be released immediately so that the exporters do not have shortage of working capital.