Says govt to sternly deal with profiteers; to consider raise in minimum wage; consensus on five-year economic roadmap necessary before next general election
ISLAMABAD: Federal Minister for Finance Ishaq Dar on Saturday said that no hidden tax had been imposed in the Budget 2017-18 and they would deal with profiteers with an iron hand, adding that the government would consider raising the minimum wage. He was addressing the post-budget press conference here at the P-Block.
While offering political opponents to evolve a consensus on five-year economic roadmap and charter of economy ahead of the next general elections, Ishaq Dar announced that the government would launch $1 billion bonds for Pakistanis living abroad to invest in different development initiatives.
He said that the government would also come up with one specific sector in Islamabad for expatriate Pakistanis with GoP (Government of Pakistan) guarantee in which Pakistanis living abroad would be offered to purchase plots for which they would have to provide foreign currency and rupee component would be handed over to the Capital Development Authority (CDA).
“The Pakistani diaspora living abroad will be involved for launching two bonds worth $500 million each for undertaking mega development projects in the country,” Ishaq Dar said.
Regarding the charter on economy, he said that now it was the right time for evolving a consensus on economic roadmap for the next five years (2018-23) and charter of economy among major political parties just ahead of upcoming general elections.
The minister promised that all the outstanding refunds where the Refund Payment Order (RPO) were issued, would be settled through cash money in two phases as in the first phase, all RPOs till April 30 would be cleared by July 15 while all remaining would be settled by August 14, 2017. Regarding the outstanding amount of $800 million against Etisalat on account of privatisation of PTCL which were excluded from budgetary estimates for 2017-18, the minister said that the flawed contract was struck by Musharraf-Aziz regime but now the incumbent regime was making efforts to fulfill the contractual obligations as so far 100 properties could not yet be transferred out of total 3,000 properties from all over Pakistan. “We are making all-out efforts to strike a deal on it. I have given full secret details to the prime minister and I am quite optimistic that both sides will be able to sort out an amicable solution by excluding 100 properties which were not yet transferred,” Dar said.
Flanked by Special Assistant to PM on Revenues Haroon Akhtar Khan, Secretary Finance Tariq Bajwa, Special Secretary Finance Shahid Mehmood, Chairman FBR Dr Mohammad Irshad and Secretary Statistics Division Dr Shujaat and others on the occasion, the minister said that the Charter of Democracy was signed between the PML-N and PPP because both were not in the government, however, later on the NRO was struck at that time but he did not want to plunge into a controversy. He further said that no one knew that who would be coming into power after the next general elections, so it was the right time to evolve a consensus on economic framework for the next five years and the charter of economy to shun politics for petty gains.
The minister said that the credit to the agriculture sector would be targeted at Rs1,001 billion during the next financial year against Rs700 billion in the outgoing financial year.
For achieving growth at 6 percent for the next fiscal, Dar said that the development budget would exceed fiscal deficit during the outgoing fiscal, which is very important for indicating that borrowing would be used for development purposes.
In a bid to stimulate the growth, the minister said that Pakistan Development Fund (PDF) would be activated to finance the public sector projects with the condition that they would not allow sick and unviable projects to be made part of the PDF. “In our neighboring country, this concept had failed because sick and unviable projects would not be allowed to be included into it,” he added.
The Pakistan Infrastructure Bank, he said, would be triggered with $1 billion out of which 60 percent resources would be mobilised by the IFC through different donors. “This is the way for focusing on growth,” he added.
He said that the government envisaged Pakistan Micro-Finance Institution Company to jack up the number of small borrowers from 4 million to 10 million.
Regarding pay and pension relief which is going to cost Rs125 billion to the national kitty, the minister said that the government had decided to merge the biggest ad hoc allowances of 50 and 100 percent for civilian and employees of armed forces and then provided 10 percent raise over it. In the outgoing fiscal year, he said the government had budgeted Rs60 billion for pay and pension raise but it went up to Rs67 billion in revised budgetary estimates.
To another query regarding more increase in salaries of army personnel, the minister said that no one had raised voice when the ad hoc allowance of 100 percent for the army and 50 percent for civilian employees were announced, and now they had fought a war with bravery, so no one should raise such petty issues.
He said that the government decided to write off loans for widows who had obtained loans of Rs0.5 million which would cost Rs2.5 to Rs3 billion to the national exchequer.
The government, he said, protected the power sector subsidy for domestic consumers using electricity up to 300 units, rate of power for tubewells and for Balochistan and all these three heads would cost Rs121 billion in the next financial year.
To a query regarding the government’s inability to undertake required reforms at public sector enterprises (PSEs), the minister said that politics was played in case of PIA, Pakistan Steel Mills and Discos as a myth was created that the government was selling silver assets. The government, he said, would continue its efforts to move ahead in a transparent manner and cited the example that the National Bank of Pakistan (NBP) and Sui Southern Gas could get land of the PSM to adjust their outstanding dues so out-of-box solution would be needed to overcome the financial losses.
When asked about the Kissan Ittehad and their protest on the budget day, he said that he had given them assurances that all of their demands would be considered favorably but instead of awaiting the budget announcement they started protesting.
The debt servicing, he said, had been brought down gradually as it stood at 53 percent against the total budgetary amounts, which was reduced to 32 percent in the outgoing fiscal and they were now aiming at scaling down to 31 percent for the next fiscal 2017-18.
He said that the incumbent regime had obtained $22 billion foreign loans and returned $12 billion, so net increase in foreign debt stood at $10 billion in the last four years. The minister said that the circular debt was cleared in 45 days after assuming power in 2013.
He explained that no taxation regime was changed for milk sector in the budget. “We are writing to all the provinces to take stern action against profiteering in their respective areas as it is an administrative matter, which has nothing to do with the budget,” he added.
