ISLAMABAD: Excessive reliance in the budget for 2021-22 on indirect taxation, including withholding tax as part of indirect taxes, will further widen the gap between the rich and poor. Besides, sustainable and inclusive growth will remain a pipe dream in the absence of a paradigm shift in initiating structural reforms, economists have warned.
The economy specialists were speaking at a webinar titled “The Federal Budget 2021-22: A Review”, which was organized by Institute of Policy Studies (IPS), Islamabad.
The panelists included Dr Mahmood Khalid, Senior Research Economist at Pakistan Institute of Development Economics (PIDE), Dr Shahida Wizarat, Dean College of Economics and Social Development, Institute of Business Management, Dr Pervez Tahir, former chief economist at Planning Commission, and Dr Abdul Saboor, Dean Faculty of Social Sciences, PMAS Arid Agriculture University. IPS Vice Chairman former ambassador Syed Abrar Hussain chaired the session, IPS Research Officer M Wali Farooqi was the moderator whereas senior practitioners including Mirza Hamid Hassan, former federal secretary at Ministry of Water and Power, and Zaigham M Rizvi, expert consultant on housing and housing finance, also took part in the discussion.
The speakers said the growth target of 4.8 percent set by the government in the budget is unlikely to be sustained in the longer run given the state of the fundamentals of the economy. The proposed growth target can be short-term but will pose a challenge to the government in the future as Sustainable Development Goals (SDGs), renewable energy, climate change and capacity-building of the public sector are not in focus.
The speakers observed that better sectoral performance and fiscal discipline during the pandemic have improved growth rate. However, the revenue target of Rs 5.8 trillion, which they opined has been set to appease the IMF, is unrealistically high despite the fact that the government has failed in achieving the tax collection target for this fiscal year.—PR
Copyright Business Recorder, 2021
Comments
Comments are closed.