Prime Minister Nawaz Sharif Wednesday said the country’s economic policies were welfare-oriented and aimed at ensuring that the benefits of economic progress were delivered to the masses.
He was chairing a meeting of the federal cabinet at the Prime Minister’s Office to discuss the budget strategy for the financial year 2016-17.
In their first meeting in over seven months, the cabinet gave approval to the budget strategy paper 2016-17, according to an official statement.
The prime minister appreciated the fact that the overall economic progress achieved during the last three years of the government had set the stage for further progress and development of the country.
PM ADMIRES LAURELS:
He noted that the key economic indicators, which were at rock bottom three years ago, have improved remarkably and said it would lead to allocating more resources for the welfare of the poor and promoting the development agenda of the government.
The prime minister expressed satisfaction on the strategy for increasing revenue collection and emphasised that the taxation system should be further strengthened by widening the tax-net.
The prime minister said the government has made efforts to lower the fiscal deficit to a reasonable level by inducting financial discipline in the public sector.
He appreciated the contribution being made by expatriate Pakistanis by sending their remittances to Pakistan and directed that steps should be taken to facilitate overseas Pakistanis to send remittances through banking channels.
The prime minister also directed the Ministry of Commerce to gear up efforts to increase exports.
The cabinet meeting took note that while benefits of mega projects in the pipeline would start unfolding from next year, immediate measures were needed to encourage investment by the private sector.
The prime minister said that the current trend of GDP growth would continue to increase employment opportunities for the youth. He noted that with the China Pakistan Economic Corridor (CPEC) projects commissioning in the next few years, there will be huge opportunities for the whole region to benefit.
He said that the Chinese Council has already approved $4.5 billion for projects of Sukkur-Multan and Havelian-Thakot motorways. He said that from 1999-2013 successive governments had failed to invest in the energy sector and that his government had initiated a number of energy projects for power generation. The $34 billion of energy projects under CPEC were investment and not loan, he added.
Prime Minister Nawaz Sharif said the government would successfully overcome gas shortage within the tenure of this government.
The prime minister said that all the international financial institutions have acknowledged the economic turnaround of Pakistan. He said that efforts were being made by some of the political opponents to undermine the country’s economic take off, but the people of Pakistan would not allow them to succeed.
The prime minister emphasised that the issues of agriculture and manufacturing sectors needed to be addressed to boost growth and further strengthen the country’s economy.
The prime minister appreciated the performance of the finance minister and his team on achieving the goal of economic stability in the country and carrying forward the development agenda.
The prime minister said that efforts have been made for keeping the inflation rate under control and observed that average inflation during past three years had remained low.
He expressed satisfaction that the expected large scale manufacturing at a growth rate of 4.35 % will be highest in the last eight years.
FINANCE MINISTER GIVES PRESENTATION:
Earlier Finance Minister Senator Ishaq Dar and Secretary Finance Division Dr Waqar Masood Khan gave a detailed presentation to the cabinet members on the strategy being followed in formulating proposals for the next budget.
The finance minister, while briefing the Cabinet, said that the government was concentrating on major policy initiatives that were aimed at consolidating the economic gains achieved so far and spurring inclusive and sustainable growth, creation of job opportunities and reduction in poverty.
The finance minister briefed the cabinet that when the Pakistan Muslim League Nawaz (PML-N) government took the reigns of the government, the economy was weak and fragile and the growth rate averaged around 3 per cent while the inflation rate during 2008-13 was around 12 per cent.
The circular debt of Rs 503 billion was crippling the power sector and the economy. The fiscal deficit was hovering at around 8.8 per cent and there were predictions of default. However, due to economic policies of the government, the economy is now performing well.
He said the fiscal deficit has been on target for closing at 4.3 per cent in the current fiscal year.
He briefed the cabinet on healthy improvements in the current account of balance of payment. The deficit in current account has been reduced from $ 1.9 billion in July-March 2014-15 to $1.6 billion during the same period of 2015-16.
He said that the FBR tax collection has increased during the last nine months by 19 per cent with historic high tax collection figures of Rs 2.103 trillion. He said there has been a considerable increase in the number of taxpayers in the last three years.
He said in the medium term the plan was to gradually increase GDP to around 7 per cent and contain inflation to single digits – at less than 6 per cent. He said the government intended to bring down fiscal deficit to below 4 per cent in the next financial year 2016-17.
The finance minister concluded that the GDP growth rate was projected to be 5 per cent this year against the target of 5.5 per cent mainly due to severe setback to the cotton crop. He said that the projected growth rate will be the highest in the last eight years.
He said it would be the fourth budget of the present government and with each year the reform agenda is being carried forward.
“Our reform agenda with prudent fiscal policies will bring development and prosperity for the people of Pakistan in the coming years,” he said.