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Gloomy forecast for economy, ahead
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232
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Visits
232
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Visits
232
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April 29, 2011
According to a report IMF (International Monetary Fund) has regulated its disbursement of sixth tranche of US1.30 billion to the budget of FY2011-2012. Rejecting the request of Pakistani delegation for this tranche, IMF has stressed on Pakistan to focus on long-range steps for amelioration of economy, instead of trying to hide behind half hearted ad-hoc measures. This should (would) entail such measures as implementation of RGST (reformed general sales tax), enhancing tax net, revenue generation, less dependency on bank loans for ‘running expenses’, autonomy for State Bank, end of subsidy on energy, l and agro-taxes etc.
During the first round of talks with IMF, held in Washington, The finance minister of Pakistan, Abdul Hafeez Sheikh has admitted that there was severe resistance by parliament over tax reforms, and also conveyed the message that in order to bridge the gap between expenditure and revenue, the government could very well opt for yet another monetary fund, while the government was trying its best for payback of IMF loans.
What the rulers want to do something for reduction of budget deficit would neither be agreed by other stakeholders nor it is seen on their agenda. The average budget deficit remained at 6.4 percent during last three years but according to Finance Minister Dr Abdul Hafeez Sheikh, this time it would go up to eight percent, it means that it deficit could touch to Rs 1368 billion .To tackle the budget deficit the country on one side would has to curtail the non development expenditure and on other side, increasing the tax revenues, would be much important.
The government has already made the announcement for implementing RGST to increase the national income but it has not the support of any province on the issue. Traders and other segment of the society are also against it. They think that by RGST their all the transitions would come on record and they will be cogently tangled in the tax net. The politicians are also not backing the tax that they do not want to go against the sentiments of the people but they also know that the economy could be collapsed without it.
The guess of experts reveals that a huge sum of Rs 150billion to Rs 180 billion could be collected from RGST during its first year only. Apparently it looks good to increase Rs 200 billion to Rs 300 billion by increasing tax net but without people’s support and political patronage, its implementation seems very difficult. No other party is agreed on it except rulers. But this is not the only way to reduce budget deficit and eliminating corruption of Rs billions from Federal Board of Revenue (FBR) may also enhance revenue collection. Recently an international agency revealed in its report if the corrupt establishment leave their malpractices, then additional amount of Rs 500 billion to Rs 700 billion could be collected as revenue.
During the last regime, World Bank had provided $ 125 millions for carrying out restructuring in the FBR but this reforms programme could not succeed due to corruption and in-competency. It would be rightly said that fund given to Pakistan for eradication of corruption but as matter of fact it was exploited to promote corruption. In the NATO container case, the unprofessional conduct of the corrupt staffers of FBR expresses the plight of the department.
The economic crunch which began in 2007, not only swallowed American society but also a big part of the globe has been affected badly due to it. Now a day Pakistan is passing through most crucial time in its history when disappointment prevails everywhere. The current situation pushing more and more people below the poverty line and destitute could be present at every home. On one side our national economy is knotted with foreign debts .
To repay the loans of $60 billion , the nation has to spend Rs 500 billion to 700 billion and we are taking even more loans to lessen the budget deficit. There are numerous intuitions in Pakistan , whci have to repay the loans to each other . The country , at present can not afford to finish subsidies because most of the wealth is possessed by rich people and poor is becoming more poor . In these circumstances the end of subsidies would be as par with snatching the last loaf of bread form the poor’s mouth. It should be happened that the rulers should bring their day to day expenses to the level of a common man .Then it should be checked that either the budget deficit would increase or the income of the government adds up.
The negligence of policy makers and mismanagement in fiscal matters led the people to the point of non-tolerance. Due to adverse situation the integrity of the country has been jeopardize.
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