ISLAMABAD: The Finance Ministry, Tuesday, presented such a glowing picture of the national economy before the National Assembly Standing Committee on Finance that the committee not only declared the performance of ministry as satisfactory, but also deferred deliberations on other agenda items till next meeting.
Additional Secretary Finance Ministry Azra Mujtaba apprised the committee that both the Finance Minister Ishaq Dar and Secretary Finance Dr. Waqar Masood were in Dubai busy in talks with International Monetary Fund (IMF) for the sake of sixth tranche of $550 million under the Extended Funds Facility (EFF) program.
“Therefore, deliberations on the agenda items including imposition of General Sales Tax (GST) and other taxes as well as Credit Bureau Bill 2015 be deferred till the arrival of both Minister and Secretary Finance” she requested the committee. Chairman committee Omer Ayub and other members of the committee endorsed her stance and deferred the deliberations on the said items.
However, the members raised a number of questions about the national economy, and majority of them were related to current petrol crisis in the country. In response to these queries, she said that Finance Ministry was not bound to pay direct funds to Pakistan State Oil (PSO), even then Rs 40 billion had been provided to PSO in January.
She added that under the government’s reform program, all the state owned enterprises (SOEs) had been advised to improve their financial mechanism to get self reliance as well as to reduce dependence on provision of more allocated funds in the annual budget. To a question about privatization process, she told the committee that government placed 30 SOEs on early privatization list and out of thirty 12 SOEs had been privatized so far. The committee sought details of total proceeds of privatization process along with their category wise utilization.
Although deliberations on the state of national economy was postponed, yet the briefing papers presented before the committee and available with this scribe showed that as result of government’s strenuous effort for economic revival, Pakistan succeeded in attaining 4.14% growth rate in the outgoing fiscal year which is the highest level achieved since 2008-09. For the current fiscal 15 the GDP growth target has been set at 5.1%.
Documents highlighted financial milestones achieved by the Finance Ministry that fiscal deficit in fiscal year 14 recorded at 5.5% of GDP against 8.2% of FY 15. The deficit has been brought down successfully through prudent expenditure management strategy primarily focused on 40% cut in PM office and 30% cut in all ministries division’s current expenditures discretionary funds of PM, Ministries/ divisions discontinued.
Secret servicing expenditures of 32 ministries and attached departments, autonomous bodies ceased except ISI, IB and effective resource mobilization strategy which helped in increasing FBR taxes as well as reduction in subsidies.
Moreover, briefing papers revealed that while it recorded at 1.2% of GDP during first quarter of FY 15, during July-December of 15, it is provisionally recorded at 2.3% of GDP which will enable to restrict the overall budget deficit at 4.7% of GDP for entire financial year FY15.
In order to strengthen the social safety net allocation of National Income Support Program (NSP) increased from Rs 40 billion in FY 13 to Rs 118 billion in FY 15. Monthly stipends increased from Rs 1000 in FY 13 to Rs 1500 in FY 15. Similarly number of beneficiaries increased from 4.1 million in FY 13 to 4.8 million in FY 14 and will be raised to 5.3 million in FY 15. FBR tax collection posted a growth of 16.4% and mounted to Rs 2,266.3 billion during FY 14 as compared to Rs Rs 1936.1 billion during FY 13.
The papers prepared by the Finance Ministry stated that during July-December FY 15 the collection provisionally posted a growth of 14.7% and mounted to Rs 1162.4 billion as compared to Rs 1031.4 billion during same period in previous year. Successful auction of 3G-4G licenses, as against the target Rs 50-70 billion in the last few years, the target of Rs 120 billion in FY 14 was achieved. Still two unsold licenses worth Rs 50 billion were with the Finance Ministry. Public debt as percentage of GDP which was 63.6% in FY 13 reduced to 63.0% in FY 14.