Successive governments' flawed policies hinder inclusive growth: experts

The country has been unable to move towards inclusive growth largely because of flawed policies pursued by the successive governments in recent years. This was the gist of the panel discussion on 'progressive reforms on agenda for inclusive growth' during the first day of Pakistan Institute of Economics Annual Conference here on Tuesday.
Panel discussion was presided over by Secretary Finance Dr Waqar Masood with most of the panellists previously associated with the Finance Ministry and Planning Commission. Regressive taxation system with disproportionately higher tax burden due to about 70 per cent indirect taxation as well tax exemption and relief to the influential has been contributing to non-inclusive growth, according to Dr Hafeez Pasha, whose presentation was read out by Sakib Sherani at the Conference as Pasha's illness did not allow him to turn up, participants were told.
Pasha also pointed out high corporate and individual tax evasion in the country and emphasised the need to do away with exemptions and introduction of one time tax on corporate assets as well. He said that these measures can add Rs 200 billion to revenue. He said that the government was providing relief to various sectors of the economy to the tune of Rs 361 billion annually on different accounts.
Sakib Sherani, former Principal economic advisor to Finance Ministry, stated that inequitable growth, uneven taxation, limited access to food, and weakness in institutional framework has immensely contributed to non-inclusive growth. Sherani said that the government policies have benefited a few owners and industrialists and not the poor. He added that the country's formal sector is shrinking due to unfair taxation system and informal sector is progressing, adding that high prices of essential commodities and increase in support price has limited access of the poor to food.
Additionally, he said that burden of macro adjustment has fallen disproportionately on the poor and weak institutional framework has also allowed the rich to take advantage. All these factors, he said have been contributing to non-inclusive growth in the country with a small portion of the population benefiting from the government policies.
He said that the country needs to fix its economic model and more allocation should be made for labour intensive sector and there must be an adjustment in spending priorities with increase in allocation for education and health and moving towards more equitable taxation system by narrowing gap between direct and indirect taxation.
Pervez Tahir, former Chief Economist Planning Commission, said that stated objective of privatisation is to decrease the country's debt and improve state finances. He said that privatisation initiated in 90s neither reduced the country's debt nor improved state finances. He said that the issue of prudent fiscal management has to be dealt with by progressive taxation. Tahir said that poverty was on the rise till 2001 but thenceforth, he added, that data released by the government inexplicably showed a decline.