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September 16, 2019

Economic stability in sight as bad days over: Hafeez

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September 16, 2019

ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh said on Sunday the bad days were now over and the country was swiftly heading towards economic stability, thanks to the Pakistan Tehreek-e-Insaf (PTI) government’s timely and prudent measures.

There had been considerable growth in exports with a 73 per cent reduction in current account deficit and stable foreign exchange reserves and rupee-dollar parity, as well as stock market stability for the last couple of weeks, said Dr Shaikh at a press conference here. He was flanked by Federal Board of Revenue Chairman Shabbar Zaidi and Secretary Finance Naveed Kamran Baloch.

At the same time, he said, 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 the last year, showing 25 per cent growth. Due to decline in imports, revenues in that regard were decreased, but domestic revenue collection surged by 40 per cent during the period, he added.

He further said the government expected the collection of around Rs 1,000 billion in non-tax revenues, out of which Rs 200 billion would come from renewal of cellular companies’ licenses, Rs 300 billion from the LNG terminal’s privatisation which was expected to be finalised by December and Rs 300 billion as interest from the SBP.

The Prime Minister’s aide said some 20 state-owned enterprises (SOEs) had been put on priority list for restructuring on a fast-track basis, as the government had decided to hand over public organisations which could not be handled by government departments to the private sector. The government was also mulling over the privatisation of profitable entities, including National Bank of Pakistan (NBP) and State Life Insurance Corporation (SLIC), he added. Dr Shaikh said when he was the privatisation minister back in 2006, the then government had privatised 34 SOEs.

Dr Shaikh said during the first two months of the current financial year, the fiscal deficit remained under control as it was recorded only Rs 24 billion during the period.

The Prime Minister’s adviser said the inflation rate was lower than what they were expecting and it would hopefully come down further in the next few months. The government had taken several measures, including not 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 two months (July-August) of current fiscal year.”He 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 exporters. Under the system, which was being labelled as “faster” and operational since August 23, refund claims of the previous month would be cleared by 16th of the next month, he added.

Talking about power sector reforms, he said, the circular debt, which had been reduced to just Rs 10 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 Rs 120 billion.

Talking about the stability phase, the Prime Minister’s adviser said after assuming charge, the 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.

He said the government was confident to surpass the growth target of 2.4 per cent 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 per cent 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 per cent during 2013-2018.

Dr 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, he 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, 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.