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The Nation

Published Date: Jun 22, 2013

Budget to put more pressure on the poor, working class: Speakers

The
Sustainable Development Policy Institute (SDPI) organised a special post-budget
seminar titled ‘Federal Budget 2013-14: An Overview’ here on Friday.

MNA
Dr Arif Alvi from PTI, Senator Saeed Ghani from PPP, MNA Arfa Khalid and Qaiser
A Shiekh from PML-N, Dr Abid Qaiyum Suleri, Executive Director SDPI, and Dr
Waqar Ahmed, Deputy Executive Director SDPI, spoke on the occasion.

Speaking
as a keynote speaker, Dr Abid Qaiyum Suleri said that keeping in view the
present economic situation, budget presented by any party at this time would
have been the same. He added, "Pakistan is facing enormous macroeconomic
challenges which hardly leave any fiscal cushion for the government to be
innovative or to take popular measures."

He
said that the government has indicated to get bailout package from IMF and
therefore measures such as implementation of GST and reforms in power sector
and Public Sector Enterprises were introduced to give a clear message to
IMF.  “Measures for tax adjustment would help in documentation of the
economy, and people will be encouraged to register with the FBR. Likewise, the
continuation of the income support programme would satisfy the IMF’s demand for
social safety nets so that the adverse effects of structural reforms can be
reduced for poor people,” he went on to add.
Dr Suleri lamented that all the provinces had presented deficit budgets which
shows fiscal irresponsibility at part of provinces particularly after receiving
major chunk in federal divisible pool. He expressed that provinces must have
given surplus budgets by improving provincial tax to GDP ratio and reducing
expenditure. He concluded that although economic situation is not very
promising yet the new government can at least bridge the trust deficit of
people, donors and international community by introducing transparency and good
governance.

Senator
Saeed Ghani from PPP said that PML-N govt has introduced measures such as RGST
and tax amnesty schemes in the budget which it had earlier opposed in PPP govt.
He said that budget is a traditional budget where poor and working class have
been put under extreme pressure. He also said that PML-N claims to end
discretionary funds, but the budget has an allocation of Rs 115b under the head
‘new development initiatives’ which had no details and would probably be used
on the discretion of the prime minister.

Dr
Arif Alvi called it an elitist budget where the poor are further taxed and rich
were given benefits. He criticised that instead of directly taxing the rich,
the government has conveniently resorted to increase GST. "This increase has
already resulted into increase in inflation but unfortunately there is no
mention of addressing inflation in budget except establishing Sunday bazaars,"
he added. He also criticised claim of ending circular debt in 60 days, which he
said is not possible, without printing money as there is no other source
available.

MNA
Arfa Khalid from PML-N was of the view that new government had got economy in
the most shattered state and situation demands all parties to work together to
revive economy and spur economic growth.

MNA
Qasier Ahmad Sheikh said that present budget has tried to give the direction to
economic revival. He said that Pakistan’s growth rate was declining in last
years and new budget has tried to kick start economic growth and increase
revenues.

The
discussion was moderated by Dr Waqar Ahmad who in his remarks maintained that
promised ending of circular debt in under 60 days could result in further
increase in domestic borrowing and also the DISCO’s don’t have the capacity to
retire such debt as well. He further said that Punjab , Sindh, and KPK had
posted deficits in their provincials budgets. This will further increase the
consolidated national fiscal deficit to the tune of 0.3 to 0.5 percent of GDP.