Finance minister vows to not increase tariffs but rather boost revenue collection through incentives
Finance Minister Shaukat Tarin on Sunday predicted that if the current pace of Pakistan’s economic growth continued, the country could boast 5 percent GDP growth in the next fiscal, and more than 6 percent growth in fiscal year 2022-23.
Addressing a press conference in Islamabad, he emphasized that the government had announced a predicted growth rate of 3.94 percent for FY20-21 over data compiled by the Planning Ministry and sought to tamp down concerns of the information being manipulated. He claimed that the economic growth was in sync with the government’s stabilization efforts due to a focus on targeted sectors such as housing, agriculture, industry and exports.
The next step, he said, was to focus on price stability to curb rampant inflation. “It is Imran Khan’s promise to the people that prices will be brought down,” he said, as he reiterated the government’s claims of high inflation globally in the wake of the coronavirus pandemic.
Noting that Pakistan had, last year, gone from a country with a surplus of food to one that was required to import it due to deficit, he claimed this was a result of the agriculture sector being ignored by various governments. To address price stability of essential commodities, he said, the government would initiate corrective administrative measures.
These measures, he stressed, would include strict action against people engaged in profiteering and hoarding. The government was also trying to boost food supply through “creation of strategic reserves and dump food wherever people try to profit,” he added.
Subsequently, he said, the government wanted to establish commodity warehouses and cold storage sites. The government also wants farmers to sell their produce themselves rather than going through middlemen, he said, claiming this would also curb profiteering and boost price stability.
Focusing on growth
Noting that several economic indicators, including employment, revenue, and incomes, were linked to economic growth, Tarin said this would be a special focus of the government. He said Pakistan had traditionally employed a trickle-down approach to economic growth, but this would now be expanded to directly serve the most impoverished. He claimed Prime Minister Imran Khan would soon launch a “major initiative” that would focus both on trickle-down sectors such as housing, agriculture, industry and exports, and would also cater to the bottom-up approach.
“We will bring schemes for the people where they will have livelihoods and will give interest-free loans to poor farmers if we have to. It will be a major revolution which we will be bringing,” he claimed, adding the focus would be agriculture and industry to reduce imports and boost exports.
The finance minister also stressed on the importance of revenue collection, noting that the government would use technology to broaden the tax net. “We will not use force, rather encourage people to pay taxes, by providing them facilities,” he said, adding that the government had already reduced sales tax and petroleum levy. “We will not burden the people. Tariffs will not increase. This is our promise,” he claimed.
Tarin also weighed in on Pakistan’s grey-list status at the Financial Action Task Force, adding that only one or two conditions were yet to be fulfilled and Islamabad was optimistic of being whitelisted at the next review in June.