Pakistan People's Party (PPP) Senator Saleem Mandviwalla Tuesday claimed that the government's figure of 4.71 percent Gross Domestic Product (GDP) growth is wrong and manipulated as independent organisations are reporting it to be 3.1 percent. Chairman of Senate Committee of Finance and Revenue Saleem Mandviwalla said this at a joint press conference along with PPP leader Syed Naveed Qamar MNA and media office in-charge Nazir Dhoki at Sindh House.
"Pakistan Bureau of Statistics (PBS) is not independent; unfortunately, Finance Ministry is dictating and pressurising them to manipulate figures in their favour. The figure of 4.71 per cent GDP growth is wrong and manipulated. As reported by an independent organisation SPDC (Social Policy and Development Center) the growth rate for this year was 3.1 per cent," Mandviwalla said.
He said that the economy of the country is running under the directions of IMF. "The Budget-16-17 of PML-N government is under the IMF's dictation. The IMF is fully controlling the Pakistani economy," he added. He claimed that the government is manipulating figures each year since it has taken over in 2013. He added that it is manipulating each and every figure like GDP growth, fiscal deficit, tax-to-GDP ratio, investment to GDP, inflation rate, and unemployment rate.
Mandviwalla termed the Federal budget 2016-17 as direction less budget which has no economic vision, long term policy and strategy to improve the tax compliance, reduce tax evasion and to give a sigh of relief to the honest tax payers. He also claimed that the federal budget is completely lacking on all fronts, agriculture and manufacturing sectors are two legs on which economy stands but both are facing worse conditions over here.
He criticised the performance of the FBR and claimed that it has completely failed to enhance tax net and is skewing the existing tax payers by imposing surcharges and regulatory duties. Finance Minister in an answer to a question in Senate admitted that more than 120,000 filers have been reduced this year.
Senator Saleem Mandviwalla said that the government is manipulating the figures of Tax to GDP ratio and showing it over 12 percent but the fact is it is stagnant at 9 percent. "Direct-Indirect tax ratio in actual is 15:85 percent, because more than 25 percent direct taxes are withholding taxes collected through agents. Government has imposed record percentage of sales tax on petroleum products which reached to 54 percent and seems like government is depending on only indirect taxes," he said.
He said that that the number of Corporate Income Tax (CIT) filers is around 25,000 out of more than 60,000 companies registered and the number of active CIT filers is a mere 0.8 percent of total number of commercial and industrial electricity users. Senator Saleem Mandviwalla said that the 78 percent of the borrowed money is being spent on non-development expenditure including employees' salaries expenses.
He said that the debt-to-GDP ratio is around 64 percent which is a clear violation of Debt Limitation Act. "The Current government is getting foreign borrowing and retiring domestic debt which is a disaster for Pakistani economy. During last three years, government failed to present any comprehensive plan before the parliament for the removal of circular debt. What if the oil prices go high, again circular debt will rise," he said.
He said that this government is importing huge amount of coal to run coal based plants. This will create worst impact on exchange rate and dollar price will rise further and decrease exports value," he said. Senator Mandviwalla said that if we compare last five year position regarding Poverty Related Expenditure then, (i) Roads, Highways & Bridges budget increased to Rs 178 billion, (ii) Environment, water supply and sanitation budget decreased by 50 percent, (iii) Population planning budget decreased by 50 percent, (iv) Natural Calamities & Disasters budget decreased by 57 percent, (v) Agriculture budget decreased by 50 percent and (vi) Rural Development budget decreased by 300 percent almost.
He said that subsidies decreased by 300 percent almost, exports were Rs 26 billion in PPP government and reduced to around Rs 20-21 billion this year. Mandviwalla said that the PPP condemns the imposition of taxes on immovable property (builders) and minerals. This is a clear violation of the Constitution and this tax is a provincial subject, he claimed. About the housing scheme, he said that the government should oversupply the housing lots for poor instead of building homes or flats. He also proposed that GST should be reduced gradually on manufacturing sector at least.
It can be reduced by 1.5 percent every year, he said. Syed Naveed Qamar said the agriculture sector was the backbone of the country's economy and there was a need to allocate more resources for it to achieve food security. He also underlined a need for proper utilisation of Kissan package and asked the government to evolve a proper strategy for utilisation of funds for the development of agriculture sector. The PPP leader also stressed the need to work on energy sector for sustainable growth in industrial and agriculture sectors.
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