Federal Budget: PBF sees no ‘serious efforts’ for economic revival

KARACHI: Pakistan Business Forum (PBF) says the federal government has done ‘too little, too late’ in terms of creating fiscal space for the revival of economic activity in its over-hyped deficit budget of Rs 6000 billion for financial year 2023-24 with the combination of 106 percent of debt servicing.

Ahmad Jawad, Vice President and Chief Organiser of the PBF said no serious efforts have been witnessed in the budget speech for the revival of the economy and industry. Rs 200 billion additional taxes would impose from July 1st in the already unprecedented high inflation.

The export target set only 30 billion dollars despite 100 rupee depreciation against one dollar was witnessed in the last one year, despite 32 billion dollar export target was met in 2021. That means no benefit of depreciation will be seen in the coming months.

Again it is a huge deficit budget because major chunk of the proposed budget will be account far for repaying back the loans and interest amounts.

He said ten percent proposed super tax on textiles and pharmaceutical sector should be reviewed. 0.6 percent tax on cash withdrawal for non filers was not required at this time because it discourages the account holders to use the banking channels.

Similarly, GST of 18 percent on daily consumable items should be reviewed seriously.

Jawad said no concrete efforts were seen for the revival of industry in the proposed budget, which was unfortunate. Similarly tax on non filers up to 30 percent in the real estate sector could also discourage the business activities.

Further establishment of the export council is a welcome initiative in the budget but let’s see what will be SOP’s of that Council. However waiver of tax exemption for youth entrepreneurs on AOP’s not above the age of 30 was appreciated, he said. PBF; however, appreciated the minimum wages of Rs 32000.

Similarly in the agriculture sector, PBF Vice President Jahanara Wattoo said duty exemption on hybrid seeds including import of used combined harvesters is appreciated.

Program of 50,000 agriculture tube-wells to be shifted to solar is need of the hour. Including PM youth business for agriculture graduates of allocation of Rs 10 billion is a good step but amount was not sufficient, she said. “The agriculture disbursement target of Rs 2250 billion was a good step, but I feel at this high interest KIBOR; how farmers could avail that facility.”

She further said increase only Rs 50 billion for Benazir Income Support is not sufficient in the ongoing scenario.

Economic and financial analyst, Ateeq Ur Rehman said that exemption of duties on import of seeds and agricultural machinery is a great step towards growth of agricultural produce. “I have been emphasizing and insisting on agricultural growth of Pakistan. Government’s interest was declining on it. This Budget speaks widely on it. But reduction of electric tariff for tube-wells for watering agricultural land was needed; this budget is silent on it, he said, adding this would have been great relief to farmers.

He spoke of flood disaster, estimating it as a national loss of more than $ 30bn.

However, a businessman, Talat Mahmood said that target of Rs9,200 billion revenue not only looks difficult, but, it can also have far-reaching negative consequences, because, last year’s target was Rs 7,500 billion, which is still under failing efforts to achieve. Last year, the economic growth rate was close to 6%; while this year the economic growth rate has dropped a lot to only 0.29%, he said.

Copyright Business Recorder, 2023