Govt has presented inclusive, growth-oriented budget says Tarin
Finance Minister Shaukat Tarin said on Saturday that the federal budget for the fiscal year 2021-22 was “growth-oriented” and the real challenge for the government was to achieve inclusive growth for everyone.
“For the first time we have given an overall growth-oriented budget,” Tarin said, pointing to innovation in revenue collection, incentives given to exporters and exemption of duties on local industry.
He said the government’s main focus in the budget was to not make poor people wait for the trickle-down effect to reach them.
“God has given us the ability in this budget to become a means for the poor so they understand that this government will not wait for trickle-down [effect]. Our challenge is to do inclusive growth for everyone.
“There will be growth because you saw how we raised [funds for the] Public Sector Development Programme and gave relief to the industrial and agriculture sector,” Tarin said.
Tarin said the poorest four million households across the country would be eligible for government help based on a “non-political” survey on household income levels. “We don’t want to play politics with the poor.”
The finance minister said that urban households would be provided Rs500,000 in interest-free business loans and up to Rs2 million for housing loans.
Farming households would, meanwhile, be provided with interest-free loans of Rs150,000 for every crop and Rs200,000 for leasing tractors and other farming equipment and machinery.
Tarin added that through the technical training and skill development programmes, one person from every household would be made employable. The finance minister said that skill development programmes would be particular to the needs of the area and its local industry.
Stressing the need for sustainable economic growth, the minister said it was necessary to increase Pakistan’s exports to 20 per cent of the GDP in the next eight to 10 years from the current 8pc.
“We gave whatever relief we could [in the budget], not just on textiles but also for other industries so that the export base widens,” he said. Tarin added that restrictions had been lifted from special economic zones set up under the China-Pakistan Economic Corridor to attract Chinese investment and manufacturing so that the country could earn foreign exchange.
“We rationalised taxes on the IT (sector) and we want to increase growth in IT exports to 100pc every year,” he said, adding that duties and taxes on raw materials on export-oriented industries had been eliminated as well which would strengthen local industries and reduce imports.
Commenting on the proposed increase in duties on internet usage and on phone calls, Tarin said: “We are not doing it at this time.” He said the proposal had been opposed by the prime minister and the federal cabinet so it is “off the table”.
The minister pointed to the lack of revenue as another major impediment to economic growth and said the government wanted to “accelerate” revenue collection by the Federal Board of Revenue (FBR) to 20pc in seven to eight years.
He added this would also allow the federal and provincial governments to carry out development projects without taking loans.
Therefore, the revenue collection target has been set at Rs5.8 trillion for the next fiscal year, he said, adding that it was “realistically aggressive” but expressed his confidence that it would be achieved.
He said the target would be achieved through a number of measures such as bringing more people into the tax net, increasing point-of-sale systems to more businesses and encouraging accountability by the public through prize schemes and the track-and-trace system.
He also said that while subsidies and support had been provided to the power sector, the government would do more to bring greater efficiency.
“We will reform distribution companies through overarching independent boards and privatise them, reduce line losses and do more recovery,” Tarin said, adding that a lag of five to seven years in capacity payments was needed.
He said this was the “progressive way” for reforms in the power sector while the regressive way was to increase the burden on the people and raise power tariffs. “We have to make the power sector financially sustainable. If we don’t then we need a lot of money for transmission and upgradation,” Tarin said.
Responding to a question on inflation, the finance minister said the government would try to keep it below 8pc.
Law Student, School of Law, Quaid-I-Azam University, Islamabad
