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September 15, 2019

Bad days gone as Pakistan moving towards economic stability: Hafeez Shaikh


Sun, Sep 15, 2019

ISLAMABAD: Advisor to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh on Sunday said bad days had now gone as Pakistan was heading fast towards economic stability due to timely and prudent measures taken by the PTI government.

Addressing a press conference flanked by Federal Board of Revenue Chairman Shabbar Zaidi and Secretary Finance Naveed Kamran Baloch here, he said there had been considerable growth in exports with sizable reduction of 73% in the current account deficit, and stable foreign exchange reserves and rupee-dollar parity.

The stock market, he said, had also been stable for the last couple of weeks.

At the same time, the overall revenue collection had also increased to Rs 580 billion during the first two months of the current year from Rs 509 billion of the corresponding period of last year, showing 25 percent growth.

Due to decline in imports, revenues in that regard were decreased, but domestic revenue collection surged by 40% during the period, he added.

He said during the first two months of current financial year, the fiscal deficit remained controlled as evident from the fact that it was recorded only Rs 24 billion during the period.

The advisor said the inflation rate was lower than what they were expecting and it would hopefully come down further in next few months.

The government had taken several measures, including no borrowing from the State Bank of Pakistan (SBP) to control inflation, he added.

"We have not borrowed even a single rupee from the SBP during first the two months (July-August) of current fiscal year."

Hafeez Shaikh said the government had also fulfilled its pledge of clearing all the verified sales tax refund claims of around Rs 22 billion, filed till 2015, which benefited some 10,000 people.

The business community had lauded that initiative.

"The income tax refunds of up to Rs 100,000 pending since 2015 have also been cleared."

He said the government had introduced a new system with no human intervention to ensure immediate refunds to the exporters.

Under the system, which was being labeled as ‘Faster’ and operational since August 23, refund claims of the previous month would be cleared by 16th of the next month, he added.

He said the government also expected collection of around Rs 1,000 billion non-tax revenues, out of which Rs 200 billion would come from renewal of cellular companies' lincenses, Rs 300 billion from the LNG terminal's privatization which was expected to be finalized by December and Rs 300 billion as interest from the SBP.

Talking about power sector reforms, he said the circular debt, which had been reduced to just Rs10 billion from Rs 38 billion per month, would be zero by December next year.

He said by overcoming power theft and other losses, the government had saved around Rs120 billion.

Talking about the stability phase, the advisor said after assuming the charge, the Pakistan Tehreek-e-Insaf (PTI) government focused on the external sector and reached an agreement with the International Monetary Fund which had been widely appreciated.

It also engaged the World Bank and the Asian Development Bank, he added.

He said the private sector, vulnerable segments of society and ignored regions of the country were given special attention in the budget.

Moreover, the government also took austerity measures and reduced its expenditures by Rs 50 billion, besides freezing expenditures of military and pay of high officials, he added.

As regards the privatization process, Hafeez Shaikh said the government had decided to hand over such public organizations to the private sector which could not be handled by the government departments.

Some 20 state-owned enterprises had been put on the priority list for privatization, he added.

"When I was privatization minister back in 2006, the then government had privatized 34 SOEs," he said.

The advisor said the government was also mulling over privatizing the profitable entities, including National Bank of Pakistan and State Life Insurance Corporation.

He said the government was confident to surpass the growth target of 2.4% set for the current fiscal year (2019-20) as after gaining stability on the external front during the past year, the economy was now moving forward on the right path.

He said the government was specially focusing on the development of agriculture sector.

Over 3% growth was expected to be recorded by the end of current fiscal year in the sector, which remained totally neglected during the past regimes as evident from a negative growth of 0.8 percent during 2013-2018. Hafeez Shaikh said the government was working hard for the public welfare.

He urged the people to remain calm during the difficult time as the government had to take long term difficult decisions for their betterment.

To a question, the advisor said the visit of an International Monetary Fund (IMF) team to Pakistan was a routine matter.

It had already been agreed between the two sides that the IMF team would visit Islamabad quarterly to review the economic performance.

FBR Chairman Shabbar Zaidi while responding to a question said the number of tax filers had increased by 0.6 million to 2.5 million this year from 1.9 million last year.

Rs 6 billion had received from the new tax filers, he added.

He said the FBR had launched a mobile application through with the tax payers would be able to easily file their income tax returns and pay their taxes.