close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
June 4, 2020

Changes in NFC Award inevitable: Humayun Akhtar

Top Story

June 4, 2020

ISLAMABAD: The PTI leader and former minister Humayun Akhtar Khan has said the government would have to pass constitutional amendment for bringing changes to the National Finance Commission (NFC) Award.

Addressing an online seminar arranged by the Institute of Policy Reforms (IPR) on Wednesday, Humayun Akhtar Khan said the 18th Amendment and NFC Award possessed linkages because there was a provision into the amendment that barred the Centre from reducing share of provinces into federal divisible pool from last Award. He said the Parliament could bring changes into any law but it was appropriate time to talk about changes into NFC through constitutional amendment. He said that the NFC could bring changes through consensus building. He said that the social sector remained neglected in the country and endorsed viewpoint of renowned economist Dr Faisal Bari that no big hospital was constructed in Lahore in last 30 years despite construction of a lot of bridges, roads and flyovers. He said that he would support strengthening the local government so there was also need that the provinces should also put in place provincial finance commissions (PFCs) after obtaining major chunk of financial share through the NFC Award.

The CEO of Pakistan Business Council (PBC) Ehsan Malik asked for national action plan for economy in consultation with all major political parties.

Earlier, former finance minister Sartaj Aziz said that even before the pandemic, Pakistan had 60 million unemployed. He said COVID-19 has added an estimated 20 million more.

In his comments, Humayun Akhtar Khan said “we have pursued stability for decades with no success. We should now think in terms of growth and exports”. He said it is no surprise that economic reforms move one step forward and two steps back.

CEO Pakistan Business Council, Ehsan Malik said that COVID is an opportunity to revisit economic policy making and develop a national economic plan with broad consensus. He said the government must prioritise welfare of the common man with food and basic supplies and services. Dr Zubair Khan reminded that the economy was already doing poorly, even before the pandemic. He said fiscal deficit was high, the high interest and exchange rates had no economic logic. He said that macro-economic issues largely stayed unattended, with no fiscal adjustment. Eminent expert and LUMS Professor Dr Bari said that reforms are needed at the micro level, whereas the policy space focuses on the macro. “We must rethink the role of government so that they have greater role in education and health service to the people,” he said.

Sartaj Aziz said that there should be a comprehensive corona revival plan. He said agriculture needed especial attention because it is the economy’s backbone. He highlighted the need for a water policy and better water management. The textile sector was dependent on cotton. “And we must have policies and incentives to move to higher end farm products,” he said, adding that high interest rates harm the economy.

“SMEs are important. They employ a large number of people. SMEs must get more credit. As yet, government has not announced support for the informal sector, small vendors, and traders. They have a large share in the GDP and must get support,” he said.

Humayun Akhtar Khan said that the budget is important if it is part of a larger strategy of growth. “Fifty years of focus on stability and austerity has left us with no strategy for growth,” he said. He urged that the coming budget must put people and health workers first. Also, he said, it must support businesses. “Large and small firms must stay alive. There is a global recession and liquidity squeeze. Yet there is no national debate on health and economic issues,” he said.

He said savings and investment have fallen, with exports down 4 percent up to April 2020. Interest rate was kept high to attract ‘hot money’, which disappeared at the first sign of rate correction. He said economic recovery is not possible without putting the health challenge behind. “The other priorities he listed are help to those who have lost jobs and concessional financing and liberal support for businesses. He said the government will have to do so while keeping within the tolerance level of IMF targets.

Dr Bari further said it was not so much a lack of funds as a question of priorities from which the social sector suffered. “We prefer road projects over schools and hospitals. He said that reliance on private education has risks. With schools closed, many low cost private schools may go under. That is why government’s role in social services are paramount. We must reach out to over 20 million out of school children. Doing so is against the Constitution. Pakistan must draw a lesson from the industrial economies who educated their people even when they were developing,” he said.

Ehsan Malik said that to revive the industry, taxes must come down and firms must receive incentives. At a time when world demand has shrunk, we must focus on the domestic market. He referred to a large number of tax and regulatory measures that deter growth of industry and are barriers to new entrants. He said the government must review tax structure and rates.

Internationally known economic expert and former commerce minister Dr Zubair Khan said the government’s pandemic response shows a lack of understanding of issues with emphasis entirely on tax collection.

“This year’s budget must have a new approach. It should not have new taxes. Let the private sector breathe,” he said. “We can help the people with more jobs, which private sector growth will create,” he said.