After being castigated by private sector experts for consistent poor economic management during the last few years, finance minister Dr Abdul Hafeez Shaikh held the media responsible for negative perception on the economic front and constituted five groups to give recommendations for balance of payments, reviving manufacturing sector, improving capital markets, enhancing centre-provinces financial coordination and strengthening social safety nets.
The meeting of the Economic Advisory Council (EAC) reviewed the overall economic situation and discussed suggestions for the upcoming budget of fiscal year 2012-13. The meeting was attended by Shamashad Akthar, Nasim Baig, Hussain Ali Chandio, Shoaib Sultan, Ali Habib and other experts.
Addressing concerns of the council, the finance minister said the media is continuously creating negative perception among masses regarding economic performance of the government, while reality is much different. He assured the EAC that his economic team is doing its best for the country without taking into account any political biases. He claimed that over all the Annual Development Plan (ADP) and tax related measures were free and fair from any political objectives. He constituted five groups to give suggestion in specific areas for upcoming budget during next meeting. First group headed by Nasim Baig will look into the matters of balance of payments, second group will provide concrete suggestions on different concerns raised by manufacturing and industrial sector, third group will look into the matters of capital market, fourth group will cover provincial financing and coordination and fifth group will work on social safety nets. All groups will give their suggestions at the next meeting of the council on April 7.
Secretary finance informed that real GDP in FY2011 was 2.4 per cent while target of FY2012 is 4.3 per cent and projected GDP of 2012 is 3.6 per cent. Inflation (CPI) stood at 13.9 per cent during FY2011, target of FY2012 is 12 per cent and projected inflation in 2012 is 12.9 per cent. The fiscal deficit stood at 6.6 per cent in FY 2011, target of FY2012 is 4 per cent and projected fiscal deficit is 4.7 per cent. He informed the council that losses to economy caused by recent flood are partially mitigated by good performance of agriculture sector in Punjab. He informed about the expected measures which will reduce the deficit. The measures include austerity measures in expenditure, auction of 3G license, tariff and fuel adjustments and recovery from Coalition Support Fund.
Chairman FBR briefed EAC about the overall performance of FBR and measures adopted to enhance revenue collection during the current fiscal year. Secretary planning gave overview of the Public Sector Development Plans (PSDP 2011-12). He presented an outline of 20 mega projects under PSDP. He informed that foreign aid to PSDP has been increased to a significant level, which is reducing the overall burden on our existing financial resources. He discussed in detail the hurdles like political and bureaucratic pressure, poor project appraisal, over run cost of projects etc, faced by planning commission in overall project planning and implementation process. Governor, State Bank of Pakistan said the banking sector seems resilient despite the European financial crisis. He informed that some foreign banks were in pipeline to operate and invest in Pakistan.
