Advisor to Prime Minister on Finance Dr Abdul Hafeez Sheikh says economy will be in stabilization mode over next six to twelve months before moving in the phase of recovery and high growth.
He was unveiling economic roadmap at a news conference in Islamabad this afternoon along with government economic team including Minister for Planning Khusro Bakhtyar, Power Minister Omar Ayub, Minister of State for Revenue Hammad Azhar, FBR Chairman Shabbar Zaidi and Special Assistant to PM on Information Dr Firdous Ashiq Awan.
Giving an overview of the economic indicators the PTI government faced after coming into power, Dr. Abdul Hafeez Shaikh said incumbent government inherited 31000 billion rupees as domestic debt and foreign loans were hovering around 100 billion dollars.
He said foreign reserves stood at less than 10 billion dollars while exports in last five years registered zero percent growth. He said trade deficit was touching the mark of 20 billion dollars while fiscal deficit had reached at a staggering amount of 2300 billion rupees. Besides, circular debt was increasing by 38 billion rupees each month.
Advisor to Prime Minister on Finance said the government took various steps to manage the economy, including raising 9 billion dollars through friendly countries.
Talking about the next steps of the government, Dr. Abdul Hafeez Shaikh said IMF board will give approval in next few weeks to the staff level agreement signed earlier with Pakistan.
He said the asset declaration scheme introduced by the government will give a chance to people to declare their hidden assets at a very reasonable rate and become part of formal economy.
He said 1.2 billion dollars deferred loan facility of IDB will also start from next year and will improve confidence on our economy.
Referring to IMF program, Dr Abdul Hafeez Shaikh said signing a programme with IMF will also send good signal worldwide that Pakistan is managing its economy in a disciplinary fashion.
Advisor to PM on Finance said next budget will be austerity oriented. For revenue mobilization, he said, a target of 5550 billion rupees target will be set for FBR.
He said 350 companies are paying 85 percent share of tax in Pakistan. Only two million Pakistanis file taxes and out of which 1.4 million are salaried. He said new data sources will be explored to identify potential tax payers to bring them into tax net. He said data of 150,000 Pakistanis has been obtained from 28 countries and it will help determine the tax evaders.
Dr Hafeez Shaikh said in order to shield the people from impact of inflation government will earmark 216 billion rupees in budget for electricity users consuming less than 300 units per month. He said small gas consumers will also be protected through similar program.
Dr Hafeez Shaikh said cash transfers under Ihsas program budget will be increased from 100 billion rupees to 180 billion rupees. He said a sum of 46 billion rupees will be reserved for development in erstwhile FATA.
Advisor to PM on Finance said a subsidy of two billion rupees has been given be the government to provide relief to people in Ramazan and additional 30 billion rupees will be earmarked for food subsidy in next budget.
Dr Hafeez Shaikh said despite economy's lower growth rate, jobs can be generated through effective policies. He said the government's flagship program of construction of five million houses can create jobs in 28 allied sectors.
Advisor to PM on Finance said Kamyab Jawan is another program of the government that with a budget of 100 billion rupees will enable youth to start their own businesses.
He said agriculture will be given special focus in next budget for employment generation.
Dr Hafeez Shaikh said in next budget our thrust will be on manufacturing rather than trading as it creates more job opportunities for people.
He said in next budget private sector will be motivated to create jobs by giving them tax breaks on new hiring.
He said PSDP of 925 billion rupees is being given to planning ministry to complete the ongoing development projects.