Growth focus of upcoming budget: Hafeez


ISLAMABAD – Federal Minister for Finance Dr Abdul Hafeez Shaikh said on Friday that the acceleration of growth, employment generation and relief for the common man would be focus of the upcoming budget for Fiscal Year 2011-12.
Speaking to media after inaugurating a public lecture that was part of Planning Commission’s ‘Economic Growth Seminar Series,’ the federal minister said that all relevant stakeholders would be taken on board in the formulation of the upcoming budget.
“Economic experts, parliamentary leaders, representatives of business and chambers of commerce and industry and other stakeholders would be consulted before finalizing the budget proposals,” the federal minister said. He said that the budget would be prepared keeping in view the changing trends in world adding that the government would present a budget that would facilitate creation of an atmosphere for job creation and growth rate acceleration.
The minister stressed that the Economic Advisory Council (EAC) in its recent meeting has discussed the overall economic situation and upcoming budget. He indicated that Pakistan was passing through a critical phase, adding that although the growth for the current year was set at 4.5 percent, due to the devastation wreaked by the floods it was revised downwards to two percent.
However, he expressed hope that the growth rate for current financial year will be 2.5 percent. Speaking on oil prices, the federal minister said that the government intends to put the minimum possible burden on the public, adding that it lacks funds to provide subsidies. He said claimed despite these challenges, there have been positive movements on the economic front, saying that the inflation has come down to 14 percent while exports in February 2011 witnessed an increase of about 46 percent over the same month of last year.
The federal minister emphasised that remittances would also cross $11 billion mark while the exports are expected to touch $22-24 billion this year with foreign exchange reserves standing at roughly $17.5 billion. Wheat production would reach at 25 million tons this year, the federal minister said, adding it would definitely be a boon to the rural economy.
To a query on State Owned Entities (SOE), the federal minister said that proposals in the works which will provide autonomy to these entities and run these on innovative manner to induce professionalism. He said that the proposal for making a holding company was also discussed during the EAC meeting.
Regarding taxes, he said that all incomes must be taxed without going into details and stressed there was a need for legislation to implement it. Earlier, speaking at the lecture, the federal minister said that Pakistan economy had witnessed times of considerable growth; however these spurts could not be sustained.
In her public lecture on “Effectiveness of Foreign Aid and Relationship between donor and recipient country,” Centre for Global Development President Ms Nancy Birdsall, stressed the need for bringing about a transformation from transaction-oriented aid to resulted oriented aid.
She delivered a detailed lecture on Cash on Delivery (CoD) aid which she said focuses on outcome instead of cash imbursements and inputs. She said that under this mode of aid, the recipient government makes decision on about what to do with the resources and make progress on the outcomes, adding that third party verification is made on the government’s annual progress report.
She said that COD contract, annual report and the third party verification is to be made public. Among others, the lecture was attended by Deputy Chairman Planning Commission, Dr Nadeem-ul-Haq, member, Dr Ashfaq Ahmed and other officers of the commission and ministry of finance as well as members of civil society.