ISLAMABAD: The economic team has informed the political leadership that growing gap between revenue and expenditure has increased the vulnerability of fiscal framework, requiring the federal and provincial governments to tighten belt with a view to putting economy on track, it was learnt.
Sources said that an overview of the economic situation was given to the political leadership and it was informed that rising expenditure on subsidies, defence spending and increase in debt servicing have been consuming more than the entire revenue collection which is hardly over 9 percent of the GDP.
The situation, therefore, warrants a political consensus on reforms programme, otherwise the country would be facing twin deficits in the next few months. After fiscal deficit, pressure would be on current account soon because foreign inflows are hard to come by in near future.
Later, talking to media after giving separate briefings to the leaders of Pakistan Muslim League (N), Muttahida Quami Movement (MQM) and Awami National Party (ANP), Secretary Finance Dr Waqar Masood said that the attitude of both the sides was very positive during the four-hour briefing and there was an agreement on the need to make joint efforts to deal with economic challenges.
He said that economic team apprised the political leadership on budget deficit that had reached 3 percent of the GDP, which was not sustainable in the current economic scenario. Underscoring the need for belt-tightening across the board, Waqar hoped that consensus would be developed by the political leadership on National Economic Agenda for economic stability in the upcoming two meetings.
He said the government would place before the political leadership its proposals and budgetary correction in next meetings. One such meeting with political leadership would be held on Wednesday (today) and subsequent one on January 26. Only after these meetings would the government take into confidence the coalition partners on the progress achieved in these meetings, he added.
Waqar said that point-by-point discussions were held during the meeting with Pakistan Muslim League (N) team on the reforms agenda proposed by Nawaz Sharif. He said that discussion with them was also held regarding their proposal for an independent accountability commission.
On their proposal of a 30 percent cut in expenditure, he said the same demand should also be made to the provinces. The economic team was headed by Finance Minister Dr Abdul Hafeez Sheikh and other members included Minister for Petroleum Naveed Qamar, law Minister Babar Awan and Senator Raza Rabbani. Earlier, talking to media Farooq Sattar of Muttahida Quami Movement (MQM) said that today's briefing by the economic team was on economic problems. He said in the next meeting proposals to solve the problems would be discussed.
He said that every political party had its own reform agenda and "naturally after mutual consultation, an agreement consensus would be reached on reform agenda." He said it would be up to the Prime Minister and Pakistan People's Party (PPP) to show how they wanted to take along the political parties on the issue.
Awami National Party (ANP) leader senator Haji Adeel expressed the hope that political consensus would be reached on economic reform agenda to provide some relief to the people hit by unemployment and terrorism. He said economic team of the government had given briefing to the political parties on political situation while proposals in relation to corrective measures would be discussed in the next meetings. Bushra Gohar said time had come to bring the privileged class into the tax net and welcomed the consultation process with all the political parties initiated by the government.
He said the briefing was meant to inform the political leadership about the economic problems. Haji Muhammad Adeel, Bushra Gohar and Afrasyab Khattak of ANP attended the briefing on the economy whereas MQM delegation comprised Farooq Sattar, Babar Ghauri and Haider Abbas Rizvi. Pakistan Muslim League (N) was presented by Ishaq Dar, Pervez Rashid and Mehtab Abbasi.
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