Published Date: May 2, 2012
NEXT BUDGET MUST CATER TO ENERGY NEEDS
Dr. Abid Qaiyum Suleri, Executive Director, SDPI, has said that the next budget must cater to the long- and short-term energy needs as current energy mix in Pakistan is mostly relying on oil consumption, hence not sustainable.
Dr Suleri was addressing the ‘Pre-Budget seminar 2012-13’ organised by Sustainable Development Policy Institute (SDPI). Tahir Dhindsa, Editor of Economic Bulletin at SDPI, conducted the proceedings.
Dr. Suleri said that costly energy increases the cost of production which subsequently makes it hard to compete with regional economies based on cheaper fuels like coal.
Sakib Sherani, former Principal Economic Advisor Ministry of Finance, said that the government does not have the fiscal space available for coming budget after the sharp compression of resources after NFC. He said that the Centre was left with only 30-35 per-cents of divisible pool that also had to cater debt-servicing, defence, federal PSDP and many other expenses. Talking of flaws in NFC, he said that onus must be placed on provinces arguing that centre can only service NFC if provinces increase revenues and implement integrated Value Added Tax (VAT).
He was of the view that forthcoming budget had become irrelevant in absence of obligation for reforms by international financial institutions, overestimation of revenues and underestimation of expenditures in budget 2011-12 and failure to implement agreed macroeconomic reforms.
Dr Vaqar Ahmed from SDPI asked for reconfiguring budget from fiscal to human capital declaring that budget making process had become only an accounting exercise for government officials instead of a planning framework for socio-economic development in the country. He said that Pakistan has no debt sustainability strategy and over 30 % of current account expenditure is spent on interest payment.
Mian Ramzan from Islamabad Chamber of Commerce and Industry stressed on the need for consistency in economic policies and putting focus on promoting entrepreneurship in coming budget. He talked of undue burden on existing taxpayers and urged to increase tax base by giving incentives to people.