EAC endorses Ishaq Dar’s proposal of Charter of Economy

The Economic Advisory Council (EAC) in its 5th meeting held here on Saturday fully endorsed Finance Minister Ishaq Dar’s long standing proposal for signing a Charter of Economy by all political parties in the country. Participants of the meeting agreed that economic development of the country should be above all other considerations and remain so irrespective of the change of regimes. The meeting also expressed consensus on continued economic reforms.

The finance minister at the outset of the meeting welcomed the participants and gave a brief overview on current economic profile of the country particularly highlighting developments related to the successful review of the IMF programme concluded recently and updates on the government’s privatisation programme. He said the pre-budget recommendations of the last EAC meeting had been made a part of Federal Budget 2014-15, and their implementation was being actively pursued. He apprised the meeting that key EAC recommendations were incorporated in the Budget and added: “we have consistently followed up with all the ministries to ensure their timely implementation”.

Finance Secretary Dr Waqar Masood gave a presentation on the economic situation of the country and shared recent growth figures for different sectors of the economy. He also talked about developments on fiscal, monetary measures, balance of payments situation and public debt fronts during the first six months of the fiscal year 2014-15. It was discussed that inflation has been stable and economy is expected to grow around 5 per cent which will be a hallmark achievement. The meeting was also apprised about the recent measures for shifting short-term borrowing towards long-term.

Federal Board of Revenue Chairman Tariq Bajwa briefed the meeting about the latest position with regard to tax collection and additional taxation measures being undertaken. He also apprised the meeting about the reform measures being carried out by FBR to broaden the tax base and improve tax administration.

Prominent economist, Dr Ashfaq H Khan on this occasion suggested for improvement in e-filing of returns with the FBR. He said improvement in this regard would facilitate the tax payers. The finance minister at this juncture invited Dr Sania Nishter to dilate on the findings of the task force on social safety nets that had earlier been formed under the Social Sector Sub-Group of the EAC. Dr Sania stated that the task force would be submitting its final report within a month and highlighted the important findings that had emerged from the task force’s deliberations to date. The task force, it may be added, had been mandated to examine the existing social protection framework in the country and come with recommendations for improving targeting, efficiency and eliminating duplication and overlapping between different programs.

Farooq Rehmatullah from the energy sub-group shared important results from some of the analytical work undertaken on the growth potential of the aviation sector in Pakistan and the preparation of an integrated energy plan. The finance minister highlighted the initiatives undertaken by the government to eliminate the energy side bottlenecks and informed that 7000 MWs of new generation capacity would be added to the national grid till 2018.

The meeting was informed that significant reforms had taken place since the previous EAC meeting. These include strengthening exports through a multi-pronged strategy and implementation of institutional/governance reforms; review of social safety net programs to improve targeting, reduce overlap, and increase efficiency; broadening the tax base by improving registration of new tax payers, raising cost of non-compliance, streamlining payment process for tax payers, and bringing high net worth Individuals into the tax net. A tax commission has also been established to improve collection and administration of taxes, the meeting was told. Other important reforms include ensuring operations at optimal efficiency level in energy sector PSEs through strategic private sector participation.