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Dawn

Published Date: Jun 23, 2013

Provinces criticised for deficit budgets

Pakistan
is facing enormous macroeconomic challenges which hardly leave any fiscal
cushion for the government to be innovative.

This
was stated by SDPI’s Executive Director Dr Abid Qaiyum Suleri while speaking at
a post-budget seminar, organised by the Sustainable Development Policy
Institute.

PPP’s
Senator Saeed Ghani stated that the PML-N government has introduced measures,
such as RGST and tax amnesty schemes in the budget which it had earlier opposed
during PPP government.

MNA
Arif Alvi of Pakistan Tehreek-i-Insaf (PTI) called it an elitist budget where
poor are further taxed and rich were given benefits.

Instead
of directly taxing the rich, the government has conveniently resorted to
increase GST.

"This
increase has already resulted in increase in inflation but unfortunately there
was no mention of addressing inflation in budget except for establishing Sunday
bazaars," he added.

Dr
Abid Qayyum said that government had 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
the IMF.

"Measures
for adjustment taxation would help in documentation of economy, and people
would be encouraged to register with the FBR.

Likewise,
the continuation of the income support programme would satisfy IMF’s demand for
social safety nets so that the adverse effects of structural reforms can be
reduced for poor people," he said.

Dr
Suleri lamented that all provinces had presented deficit budgets which shows
fiscal irresponsibility on the part of provinces, particularly after receiving
major chunk in federal divisible pool.

He
stated that the provinces must have given surplus budgets by improving
provincial tax-to-GDP ratio and reducing expenditure.He concluded that although
economic situation was not very promising, the new government can at least
bridge the trust deficit of people, donors and international community