PESHAWAR: The federal budget for the fiscal year 2021-22 is not much different from the previous budgets endured by people, said a businessman adding, it would be followed by many mini-budgets.
Zahid Khan Shinwari, a known businessman and former president of Sarhad Chamber of Commerce and Industry (SCCI), while commenting on the federal budget presented in the National Assembly on June 11.
In the current financial year, he said that the tax revenue target of Rs5500 billion was once reduced to Rs5000 and then to Rs4800 billion which even then couldn't be achieved despite tall claims of historical revenue collection by the Federal Board of Revenue (FBR).
“If we could collect only Rs4300 billion in the current financial year then how an ambitious target of Rs5800 billion could be achieved by collecting 24 percent more revenues,” he posed a question.
The businessman said the cursory glimpse on the budget draft for financial year 2021-22 clearly showed the Pakistan Tehreek-e-Insaf (PTI) government’s shift in policy from austerity to spending spree to push economic growth.
He said that the around 40 percent increase in the Public sector Development Programme (PSDP) was phenomenal and rather unprecedented along with a hike in all expenditures with various margins.
“The biggest question is the huge Rs3900 billion budget deficit (which is also based on the assumption that Rs570 provincial surplus will be added back to make it Rs3400 billion), then why the Tabdeeli Sarkar couldn't work on curtailing non-development expenditures by reducing and shrinking the overinflated but inefficient size of government ministries and departments,”Shinwari posed another question.
He said that many countries around the world had introduced the concept of smart government and that Pakistan should also slash the defence budget. He also called for rescheduling and restructuring debts with lenders to create breathing space.
“If we borrow Rs4000 billion this year to bridge the gap between revenue and expenditures then how can we expect to reduce the burden of debt servicing, which has reached 80 percent of tax revenue i.e Rs3000 billion,” said the ex-president of SCCI, adding that as to how get out of this vicious cycle. Next issue is restructuring and reforming FBR and taxation policy, which is the main hurdle in the economic growth and investment.
He said that they appreciate the minister’s announcement that several withholding taxes will be eliminated but still the ratio of indirect taxes was very high burdening the common man.
The businessman said that there were no incentives announced for the local or foreign investment, which was essential for jobs creation and revenue generation but it was ignored surprisingly.
“Also, we don't see any policy changes to rehabilitate and revive the economy of backward areas of the country. Clearly, we have reconciled with the fact that people of Khyber Pakhtunkhwa and Balochistan will always remain backward and industries and trade activities will only be made flourished in Punjab and Karachi,” he went on to say.
Shinwari said the Constitution ensures equal opportunity to all citizens, then why equal level playing fields are not being provided to investors in economically backward areas of Pakistan including KP merged tribal districts.
He said the state owned enterprise (SOE) had become white elephants and causing losses upto Rs700 billion per year. “The need is to get rid of them and privatize them on priority basis,” he suggested.
