December 2, 2020

Steps Taken By The Government To Improve The Current Deficit Situation

Dr. Hafeez Sheikh, PM’s advisor on finance, addressing the press on 1 July 2019, said that, “Handling current account deficit, implementing strict austerity measures, facilitating industry, mobilizing revenues and helping downtrodden are the main focus of the next year’s budget. ”

He said that Pakistan’s economy was in great stress because of the huge trade deficit and the debt situation. He added that Pakistan’s total debt has reached a total of PKR 31,000 billion and the external debt has reached USD 100 billion.

Sheikh said that the current account deficit has been reduced to $13.5 billion, down from $20 billion, through tariffs imposed by the government and will be further reduced to $7 billion in the coming year. He added that no tariff had been put on industrial raw material imports and the industrial sector will be given subsidies on oil and gas.

He added that $9.2 billion were borrowed from close allies and $3 billion worth of oil would be given on an annual basis on deferred payment by Saudi Arabia.

He said that PKR 2.9 trillion loan taken by previous governments would have to be paid and 50% of the taxes would have to be given to the provinces because of the constitutional obligation.

He said that to cater for all these expenses the government has started the austerity drive. He added that the austerity drive started from us, as the pay of the ministers was reduced by 10% and the expenditure of the PM house was reduced drastically. He added that the pays of government officials are not being raised as much as in the previous years and now even the army has voluntarily refused a raise in their budget.

He said, that the budget for the downtrodden under the social safety net was increased to PKR 191 billion from PKR 100 billion.

Sheikh said that PKR 152 billion were reserved for the newly attached tribal areas of KPK (FATA) and PKR 925 billion were reserved for the Public Sector Development Program (PSDP).

He said that the government has set the revenue target to PKR 5500 billion and added that the country can not move forward without increasing the tax net. He urged the people to take benefit of the amnesty scheme while they can, as the newly formed Benami commission will go after Benami assets after Wednesday, July 3, 2019, which is the deadline of the amnesty scheme.

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