‘Economic crisis can be overcome by making more electricity’

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LAHORE – The present economic crisis in the country could be overcome by enhancing power supplies, increasing tax collection, improving governance, reducing internal and external debts and constructing the Kalabagh Dam through mutual consensus, participants of a discussion on the country’s economic crisis at the Aiwan-e-Iqbal said on Tuesday. Pakistan Today Editor Arif Nizami, former finance ministers Dr Salman Shah and Sartaj Aziz, former industries minister Jahangir Tareen, former trade and commerce minister Humayun Akhtar and Lahore Chamber of Commerce and Industry (LCCI) President Shahzad Malik attended the discussion. The participants suggested launching a “war against corruption” to improve the economic situation of Pakistan.
Speaking on the occasion, Nizami said that no one is interested in paying taxes and the federal government has failed to implement the Reformed General Sales Tax (RGST). He said that fuel prices are not reduced due to public pressure but to save the federal government. The veteran journalist said that agricultural inputs have become expensive, which is hampering the rural economy. Nizami said that it has become very difficult to do business in such an environment. “It is expected that the rupee would further depreciate against the US dollar,” the Pakistan Today editor said.
Dr Salman said that the 7th National Finance Commission (NFC) Award has destroyed federal resources, which was not good for the country. He informed the audience that the national economy was stable three years ago and all economic indicators were very strong but the present federal government has ruined everything. “Bank assets, FBR collections, FDI, stock market and credit ratings of Pakistan improved during the last regime,” the economist said adding that now all these indicators have entered an alarming phase and if emergent steps are not taken then things would get out of control. He said that when the previous federal government left power, inflation and discount rates were in single digits while external debts were $40 billion compared to 60 billion now.
Salman lamented that things got messed up as soon as the present government took over. He said that present federal government did not have consistency in its policies, as four finance ministers; four finance secretaries and three governors of State Bank of Pakistan (SBP) have been changed in only three years. The former minister said that statements of former federal finance minister Ishaq Dar played havoc with the national economy. “Dar portrayed our economical picture as if it is on verge of collapse and it shattered the confidence of foreign and local investors,” Salman said adding that the present federal government’s finance managers did not understand the ground realities and took wrong steps. He said that non-performing loans (NPL) have crossed the Rs 500 billion mark, which is a very dangerous sign.
Presenting a solution, Salman advised the federal government to prepare a five-year plan for overcoming the energy crisis. He said that in the first step, the federal government should reduce line losses and stop power theft. The former minister informed the audience that there is a generation capacity of 20,000MW while power generation is only 10,000MW due to which the federal government should start non-operational power plants instead of installing RPPs. “We have to decide on building the Kalabagh Dam within five years, as it is the only solution for reviving the agricultural sector, producing cheaper electricity and reducing the petroleum import bill,” Salman advised.
Humayun lamented that there is no economic policy of the federal government, as interest rates are increasing while power and petrol prices are also going up. He said that worldwide, interest rates are decreasing and capital is being injected but the federal government is doing nothing to save the country from an economic crisis. The former minister said that budget for public-sector development programmes has been slashed frequently while industries are being crushed. Humayun said that there is no power and gas for industries, which is extremely dangerous for development of the country. He said that Pakistan could earn Rs 100 to 200 billion from the agricultural sector and Rs 100 billion from real estate. The former minister said that the federal government should impose heavy duties and taxes on import of luxury items to discourage imports.
Tareen backed the NFC Award and said that provinces be given their due share. He said that only God is helping Pakistan and the federal government is hampering the national economy. He said that people want to pay taxes but the federal government is not interested in collecting them. The former minister said that there is a need to increase tax collection, which could overcome the financial crisis. He backed privatisation of public-sector corporations to save the country and said that the federal government should stop leakage of Rs 300 billion from corporations such as PIA and Pakistan Railways while it also needs to stop Rs 300 to 400 billion tax evasions. Tareen said that decisions are made through leadership but no political party has shown any will to solve the present economic crisis. Giving solution of power shortage, he said that LNG be imported on war footing, as in this way, the federal government could ensure enough gas for industries and domestic users. Sartaj Aziz said Shahzad Malik also criticised the federal government’s performance and urged it to solve economic problems.

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  1. The present economic crisis in the country could be overcome by enhancing power supplies, increasing tax collection, improving governance, reducing internal and external debts and constructing the Kalabagh Dam through mutual consensus, participants of a discussion on the country's economic crisis at the Aiwan-e-Iqbal said on Tuesday. Pakistan Today Editor Arif Nizami, former finance ministers Dr Salman Shah and Sartaj Aziz, former industries minister Jahangir Tareen, former trade and commerce minister Humayun Akhtar and Lahore Chamber of Commerce and Industry (LCCI) President Shahzad Malik attended the discussion. The participants suggested launching a "war against corruption" to improve the economic situation of Pakistan.

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