Govt to adopt well-monitored growth strategy

ISLAMABAD: The government has in principle decided not to go for speedy growth rather it has decided to adopt a careful and well-monitored expansion growth strategy for economic revival distancing slowly from the contraction policy.

This decision was made in a high-level meeting of economic team, which met with Prime Minister Imran Khan in the chair here on Saturday.

All the allied economic ministries have been directed to complete their respective policies and share them with Adviser to the Prime Minister on Finance and Revenue Dr Hafeez Shaikh along with the implementation plan and stipulated timeframe, a government economic team member told The News.

He said the commerce ministry had been directed to complete and share with Dr Shaikh trade policy and Planning Commission CPEC-Vision II and Energy Ministry alternative renewable and petroleum policy with timeframe for their implementation plan.

Prime Minister Imran Khan, according to him, placed the questions seeking recipe for growth before his economic team after contracting the economy to reasonably cope with current account deficit issue and fiscal deficit to some extent.

The premier was of opinion that contraction of economy had the political and economic cost. The GDP growth came down to 3.3 percent and according to IMF it will further go down to 2.4 percent showing almost 1 percent more contraction leading to further joblessness, less revenue and less profit.

This may trigger unending agitational politics across the country posing threat to the government’s existence. The government however has decided to incentivize the private sector making it the engine of growth by injecting liquidity in the private sector. The highest level meeting decided to clear the refunds of business community at the earliest, and to this effect the FBR has been asked to do the task as early as possible. This will help cope with the liquidity issue of the entrepreneurs. The FBR says it has to clear the refunds of Rs150-175 billion yet. However, business community says refunds hover around Rs700 billion.

To stimulate economy, the government has also decided to launch mega projects under the PSDP instead of initiating small to medium projects. The initiation of mega projects will ensure consumption of cement and steel. The domestic use of cement has decreased manifold but its export has increased by 33 percent.

Currently, commercial banks are facing the liquidity crisis as the central bank sucks the liquidity to arrange borrowing by the Government in Pakistani Rupee. Now in the meeting it has been decided that the government will not borrow more from the bank in rupees which will enable the commercial banks to maintain liquidity at a reasonable level for private sector to borrow.

The meeting also discussed harassment of business community by the NAB, FIA and even FBR. After taking the notice by prime minister, the NAB chief has already said that cases belonging to tax evasion and other financial matters of the businessmen purely dealing in private to private sector will be handed over to the FBR.

It was also noticed that the FBR through media announced that said numbers of businessmen were being sent notices which was tantamount to harassing the private sector. The FBR instead was asked to go for documentation drive but in a way that it does not look like harassing the business community.

The highest level meeting has also decided to lessen the regulatory burden on the businessmen and to this effect the World Bank has established a unit in the PM Office to first map out compliance at the federal, provincial and district level through which every businessmen went through and then to do away with the unnecessary compliances as currently there are too many compliances for entrepreneurs to experience. The unit to this effect is being headed by Adviser to PM on Commerce, Textile, Industries & Production and Investment. Chairman Board of Investment and PM office are also part of the unit established for mapping out compliances at various levels.

One of the top economic advisors also shared with The News that the lower middle class was the biggest victim of pain of economy’s contraction and because of taxation and 32 percent devaluation of Pakistan Rupee the fuel price had increased to unsustainable level despite the fact that in the international market the fuel price had plunged manifold. The meeting decided to rationalize the fuel price and highlight the social sector safety spending at the maximum.