Pakistani Finance Minister Ishaq Dar said on Thursday that country’s foreign exchange reserves will cross $18.2 billion by end-2015, and from July 1, Computerised National Identity Card (CNIC) number will be treated as National Tax Number (NTN) for individuals.
The minister, who was addressing members of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), categorically stated that the government’s focused approach would continue to transform the recently achieved macro-economic stabilisation into economic growth.
After giving details about the precarious state of economy when PML-N government took over, the minister said that Pakistan in 2012 was declared a macro-economically destabilised country by many world agencies, including Asian Development Bank and International Bank for Reconciliation and Development (IBRD).
Lack of trust of world financial institutions in country’s economy went to that extent that IBRD after delisting all Pakistani banks was monitoring their activities and the depleted reserves for less than six weeks imports promoted an idea of disintegration of Pakistan in the world.
After coming into power, the government focused on four core issues, including energy, terrorism, economy and social sector. As a result, he said, macro-economic stabilisation has been achieved in 20 months period and from here would be moving forward to achieve economic growth.
The economic situation had deteriorated to that extent that half of the population or 90 million people today are living below the poverty-line and earn less than $2 a day. The most vulnerable people living on minimum wages need health and education facilities, the minister added.
Pakistan is known world over as two stages reform country, starting from policy and planning, but always had been lacking in implementation and ends up in getting funds from world institutions.
Ishaq Dar said that his government introduced six home-grown reforms which helped the country move from unstable economic situation to stable by recording 4.1 per cent GDP growth in 20 months from 3pc of last year.
Similarly, he said inflation has been brought to single digit and foreign exchange reserves incr-eased over $16bn. There is substantial growth of 3pc in tax collection. However, through good governance and facilitation, growth in tax collection could be achieved over 6pc.
Due to drastic fall in POL prices, the current account deficit was narrowed down though the government suffered a loss of Rs70bn in revenue collection. There is more revenue collection on higher POL prices, but fall in prices resulted in short revenue collection, he added.
Responding to the demand by FPCCI president Mian Mohammad Adrees, the minister said that ease of doing business index will be developed but business community should cooperate and give its input.
On the occasion, the minister asked Miftah Ismail, chairman, Board of Investment (BoI) and special advisor to prime minister to work on the index.
Dar further said that solution to the issue could be developed once you give your input which may include clubbing of around 36 provincial taxes as well as federal taxes and ‘One-Window’ could be introduced.
Speaking on energy, he said around 7000MW projects are presently under implementation and all these projects have already been funded except one. These energy projects include hydro, alternative energy, like wind and solar, and hopefully will come up by 2017.
He further disclosed that some of power plants are based on LNG and around 4000MW is going to be imported from one of the neighboring country and they have also shown interest in laying power lines. Presently, there is only 4,500MW shortfall in power but by 2017 over 10,000MW could be added.
These measures, he said, would help give impetus to economic growth and soon there would be time when country’s GDP growth would be over 7pc.
The on-going drive against terrorism, the minister said, is not against any political party or group, but is across the board and in the spirit of eliminating terrorists from the country for which Zarb-i-Azb is also going on in North Waziristan.
There is a need to improve tax-to-GDP ratio which presently less than 11pc and is the lowest in the region. The government is targeting 13pc with an objective to achieve over 15pc. Similarly, investment-to-GDP has to be increased to 22pc.
Chief Executive Trade Development Authority of Pakistan (TDAP) said efforts were being made to enhance exports but for this, the government would have to expedite payment of outstanding sales tax refunds.
Originally published in Dawn, March 27th, 2015