Budget is neither a populist nor a reformist one: traders

Federal Finance Minister Senator Dr Abdul Hafeez Shaikh on Friday unveiled Pakistan's budget for the next financial year 2012-13 that was seen very unassuming for trade and industry expecting more concessions. The budget is "neither a populist nor a reformist one", industrialists and traders observed.
Business community largely rated the budget as disappointing and said that the politically vulnerable government had avoided bold reforms, opted for cautious steps to cajole flagging growth and settle inadequate targets to rein in a gaping deficit.
They said that Dr Abdul Hafeez Shaikh didn't announce any specific programmes to spur investment. Having disappointed for having no impetus to growth, they saw the budget as a simply accounting statement of the ethical deficit that has been increasing our fiscal deficit, which was going beyond our control.
"It's not going to make investors excited," leader of business community and former President Karachi Chamber of Commerce and Industry, Siraj Kassim Teli said.
"The budget has maintained status quo rather than provided any reforms agenda," he observed. "There are some positive things in the budget such as increasing 20 percent adhoc relief allowance in salaries and pension of public servants, reducing turnover tax from one percent to 0.5 percent and custom duty from 35 percent to 30 percent, raising tax exemption limit from Rs 300,000 to 400,000," he said.
However, he termed the budget confused and vague as many things needed clarification. He was of the view that the measures adopted in the budget would not provide any relief to general public particularly poor people of the country. He said that the government would announce mini budget soon.
Commenting on export target, Acting President of KCCI, Younus Muhammad Bashir said the industry was not performing well due to a number of factors including power load shedding, law and order and high cost of doing business. He said that the budget was not clear and added that in next few days all budgetary details would be available which would clarify what actually happened in the budget.
Former President KCCI and Chairman Sindh Board of Investment, Zubair Motiwal termed the budget as camouflaged budget. He said it was disappointing as the budget had no impetus to growth and it was also a deficit budget. As far as the industry is concerned, the budget did not meet its expectations.
He maintained that manufactures were not demanding reduction in cost of doing business but they wanted that their cost of doing business should not be more than their completers in the world market. "We can not compete with this cost of doing business in the international market," he added.
Former President KCCI, Anjum Nisar said that business community expected that different slabs of Sales Tax should have been reduced and it must be fixed at 10 percent. He was of the view that the budget had provided no relief to general pubic. About reduction of withholding tax, he said it was demand of the business community. He said that no step had been announced to increase tax to GDP ratio.
Former senior vice president KCCI, Mohammad Javaid Bilwani said that he had failed to understand the budget. He said that it was a unique budget, in which the finance minister announced that he would provide whatever amount is required for resolving power crisis. Budget always has allocations, he added.
Former President KCCI, A.Q. Khalil while appreciated reduction of higher slab of Sales Tax to 16 percent, said that Sale Tax on almost 80 percent of items was already at 16 percent. He said that sales tax must be brought in single digit.
He pointed out that few days ago Governor State Bank of Pakistan presented very bleak economic condition of the country whereas the finance minister presented a very pleasant picture. Due to increasing financial problems, people are committing suicides, he added Chairman, Pakistan Automobile Dealers Association, H. M. Shahzad termed the budget as balanced in present circumstances.
Chief Patron Korangi Association of Trade and Industry, S M Muneer, Chairman Ehtesham Uddin, President, All Karachi Industrial Alliance, Mian Zahid Hussain, Vice Chairmen, Hasham A Razzak, Tariq Malik, and Chairman Media Standing Committee on Press and Media, Syed Johar Ali Qandhari have expressed their dismay over federal budget 2012-13 as the industry had not been given any incentive but rather over-burdened by levying infrastructure tax on CNG and natural gas which would bring another wave of price spiral and cost of doing business. They said that government had not fulfilled its commitments and not brought Sales Tax into single digit. They said that export sector has not been given any incentive due to which export oriented industry would become uncompetitive. They expressed their doubt that without levying agri-tax the government would not be able to meet its revenue targets.