Pakistan's economy is limping and the overall scenario is rather gloomy, according to speakers at a forthrightly seminar on 'A Roadmap to Economic Revival', organised by Karachi Branch Council (KBC) under the aegis of the Institute of Cost and Management Accountants of Pakistan (ICMAP) here late on Monday evening.
Dr Shahid Hasan Siddiqui, Chairman, Research Institute of Islamic Banking & Finance, said that the overall performance of economy during the tenure of the present government has been the worst in Pakistan's history, and the non-performing loans have been going up at an alarming rate. He suggested following measures for sustainable recovery:
-- All incomes of Rs 25,000 per month and above must be taxed effectively by federal and provincial governments, without any exemption, and their recovery should be ensured.
-- For documentation of economy, instead of imposing RGST, properties, vehicles acquired, investment in shares, national saving schemes, and bank deposits from the concealed income should be detected. Income tax should be recovered according to law. This has the potential of recovering additional about Rs 1,000 billion, or so, and would enhance tax-to-GDP ratio, also.
-- The State Bank of Pakistan must ensure that banks share their profits with depositors, in the real sense, and banking spread must be restricted to 3.5 percent.
-- Unproductive expenditure must be reduced by 40 percent.
-- For checking corruption and accumulation of bad debts, it is important that the flow of dirty water is stopped. All officials/authorities who process/approve high profile appointments, ignoring merit, must be held accountable and also those bankers and members of the board of the directors of banks who sanctioned and written off advances on unprofessional considerations as well as those members of board of governors of SBP who approved circulars 19 of 1997, and 29 of 2002 regarding 'write-off' of advances must be held accountable.
-- All members of parliament must be required, by law, not to maintain bank accounts abroad, and affidavit to this effect be obtained from them. The overseas Pakistanis should then offer higher rates of interest, of say 4 percent per annum, on their foreign currency accounts in Pakistan. This would help Pakistan to say goodbye to IMF.
Engr M A Jabbar, a former vice-president of the Federation of Pakistan Chambers of Commerce and Industry and Chief Executive of Qaim Automotive MFG (Pvt) Ltd, and Abid M Anwar, Executive Director of Niche Consultant, said that sustaining in this global economic meltdown is a big challenge to the industry and business throughout the world. "If we look at our local industry, almost more than 90 percent is sick. Only the degree of sickness and severity is different."
The main cause is that the local industry was not established on proper professional footage. The industrial plots, loans and all facilities were provided mostly to those who had no industrial experience and were granted on political or other grounds. During initial days, the margins were very high and could absorb all inefficiencies, negligence and blunders. Hence, the professional management was also not encouraged during those days.
"Now if we look at the current position, most of Pakistan's industries (both manufacturing and service) are sick and in trouble. For a business, profit is like blood in human body; so, if we wish that our industry should sustain, it must be with profit. If we do only fire fighting or take steps through conventional methods, we will not be able to succeed. We have to follow scientific steps, which are taken for chronic diseases, as sickness of our industry is also chronic and long," they said.
Prime Minister's Advisor on Textile and Chairman & CEO Baig Group of Industries Dr Mirza Ikhtiar Baig, who was the chief guest, stressed the need for a consensus to develop the economic agenda and the roadmap for the revival of economy with all political parties to have their support in the parliament.
He said he was happy that PML (N), PML (Q) and MQM have already presented their economic agenda and it is imperative to develop consensus on the important economic issues like: power sector reform, tax reform, IMF program, present tight monetary policy with higher lending rates effecting growth, inflation, government borrowing, tax on income/agriculture tax, RGST, petroleum price mechanism, new jobs creation and reduction in poverty. Earlier, KBC Chairman Tariq Hussain presented address of welcome, and the vote of thanks was presented by KBC Secretary Anis-ur-Rehman.
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