Federal Budget: Business community, political parties give mixed reaction

KARACHI: Business community and political parties expressed mix reaction on third budget of PTI government for the year 2021-22. They were of the view that the final opinion can only be shared after going through the budget documents and finance bill.

Vice President, Pakistan Businesses Forum (PBF) Ahmad Jawad has criticised the federal government for doing "too little, too late" in terms of creating fiscal space for agriculture sector in its over hyped budget 2021-22.

He said despite two digit inflation and record growth in major agriculture crops in the fiscal year of 2020-21, government once again give peanuts in the 2021-22 budget speech, except two lac loan facility without interest payment will be given to small farmers on the account to purchase tractors and other agriculture machinery; including one lac and fifty thousand loan facility without interest payment for sowing of all crops given to small farmers. Further one billion rupee will be allocated to increase olive production.

Unfolding the details, Jawad stated that there was no increase in the agriculture credit facility. No incentive announced in the budget speech for the enhancement of agriculture exports, no incentive given for the new start ups in the field of agriculture sector, no incentive were given on the subsidy of fertilisers for the farmers and no incentive given to horticulture sector which is one of the major share holder in the country's exports. However, tax exemption on the storage facility for agri crops is a welcoming step.

He further said government fixed the agriculture growth target at 3.5 percent for the coming fiscal year and it seems agriculturists will achieve the target on there own and once again provide due support to the country GDP target for the year of 2021-22.

Ahmad Jawad welcomed the development package for the areas of South Balochistan and the city of Karachi and similarly termed GDP target of 4.8 percent a good omen for the economy; including relief for telecom sector in the form of duties.

Former President of KCCI, Abdullah Zaki welcomed the reduction of sale tax rate from 17 percent to 12.5 percent and exemption of value-added tax on small cars up to an engine capacity of 850cc.

He said that the reduction of duty on industrial raw material will help reduce the cost of doing business. Revenue target is achievable, he added. He also welcomed the self assessment scheme and expressed hope that it will reduce blackmailing.

Showing his dismay over the federal budget, Pasban Democratic Party (PDP) Chairman Altaf Shakoor said the hapless nation again witnessed yet another disappointing budget of the PTI government in which no relief was given to price hike affected masses. He said public sector development programme of just Rs900 billion is peanuts for provinces.

He said 25 percent raise in salaries of government employees was promised but just 10 percent increase was given to them, which is injustice and trickery. He said the price hike is on the fire and raise in salaries is not proportionate to it.

He asked who would get Rs530 billion subsidy for electricity as the electricity rates in Pakistan are already highest in Asia.

Altaf Shakoor said that tagging Rs12 billion for agriculture sector is a joke. He said 8 percent target for inflation in this budget would open new floodgates of poverty and hunger in Pakistan.

He said it seems that these rulers would present a mini-budget within next six months.

Altaf Shakoor said that approval of this budget from cabinet is disappointing. He said mafias are benefited in the budget while there is nothing for the poor. He said this heavily deficit budget would further increase burden of loans. He said the PTI government never gave attention to widen the tax net and find new avenues of revenue collection.

He said 4.8 percent growth rate is lower even to the growth rate of Bangladesh. He said the government has done nothing to promote industry and this budget has also not allocated sufficient funds for industrial growth.

He said both government and private sector employees are hard hit by price hike and steps should be taken to increase the salaries of private sector employees at least at the rate of 10 percent.

United Business Group, spokesman, Mirza Ikhtiar Baig termed the federal budget as good budget in the present circumstances and added that efforts have been made to support the neglected sectors including IT, SME etc.

He said that Pakistan is an agriculture country but in last few years cotton production has declined from 13 million bails to 6 million bales. He said efforts have been made to improve agriculture products, which is commendable.

He especially thanked Chairman FBR Asim Ahmed and Member Inland Revenue (Operations) Dr Ashfaq Ahmed for crossing Rs4.143 trillion revenue collection in 11 months of the current fiscal year and payment of Rs250 billion refunds under faster system that has helped exporters to improve their cash flows resulting in recent increase in exports.

Copyright Business Recorder, 2021