Unprecedented increase in oil prices main cause of inflation

Problems in supply management coupled with unprecedented increase in oil prices are main causes of staggering inflation rather than low interest rates. "A 2 percent high increase in the interest rates has adversely contributed to the cost of doing business," Advisor to South Asian Federation of Accountants (Safa) Badaruddin Fakhri observed at a post-budget talk, organised by Rotary Club of South &e East here, on Tuesday.
Fakhri said that indeed the budget 2005-06 was growth and export-oriented, but undoubtedly budget could be termed as "of the rich, for the rich and by the rich, offering very little to unprivileged masses of the country."
He urged the government to take concrete steps for poverty alleviation and allocate more resources for education sector, adding that the government should also maintain smooth supply of eatables as being an agriculture country shortage of such items here is a very sad state of affairs.
He said the present government took a positive initiative with a medium term macro economic framework for the next five years to take forward the economic process on long-term basis.
On massive allocations for the Public Sector Development Programme (PSDP) in the budget, the Safa advisor said that it would drive the economic activities in the country.
Fakhri, however, pointed out that implementation is a weak area in utilisation of development funds.
"We have seen that major funds were set aside in the past, but remained un-utilised," he added.
He called for capacity building of economic managers to seriously look into the matter and emphasised the need to make the process of award of work and payments of contractors efficient.
Terming the massive concessions to textile, surgical, leather and carpet industries, he said it was a right step to make the products competitive.
The Safa advisor advocated the zero rated duty on import of all machinery, which is not manufactured locally and said that it would help promote industrialisation in the country to solve the problem of unemployment and improve the economy.
Fakhri said that huge targets set for different sectors of the economy are achievable hence, the concerned departments should perk up their efforts.
He added that although the revenue target of Rs 690 billion is huge, the present tax collection team has the capability to achieve it positively.
The Safa advisor also spoke at length on privatisation process, SMEs development and other areas of the budget.