Finance Minister Shaukat Aziz said on Tuesday that the government would build bipartisan consensus on the medium-term and long-term economic policies as inconsistency in the past was the bane of the country's politics.
While addressing a pre-budget seminar on investment opportunities he said that political changes led to deliberate U-turns in the economic policies resulting in dire consequences.
The Minister said that remarkable economic progress has been achieved by China, Thailand, Malaysia and other countries because of continuity of policies, though Thailand witnessed changes in the government.
Shaukat said that the objective of the bipartisan policies is to carry forward Pakistan to its true potential.
Earlier, Advisor to Finance Ministry, Ashfaque Hassan Khan, and Deputy Chairman of Planning Commission Dr Mohammed Akram spoke on future economic progress and planning.
Ashfaq dwelt at length on the macro economic stability, while Akram gave his vision of the technology-driven rapid progress.
The Finance Minister also hinted that no new tax would be levied in the budget and said that the number of taxes would not be increased.
Similarly, he promised hassle-free tax collection and further reduction in tariffs on raw materials to benefit the industry.
In his brief address to the audience which comprised editors and journalists of newspapers across the country, Shaukat said that after five percent growth of GDP last year, he expected 6.4 per growth in the outgoing (current) fiscal year and even 8 percent in the coming years.
To achieve this the government would focus on rural sector, services sector, infrastructure and agriculture which, he said, is the kingpin of economic growth.
With regard to urban area growth, he said that renewal of urban sector has been discussed with Asian Development Bank. During his meeting with the visiting Managing Director of Programmes, Iwasaki, the urban sector renewal was taken up. Initially, the Bank would be assisting Pakistan in improvement of two mega cities--Karachi and Lahore--which are fast turning into huge slums.
Another area of focus was capacity building and implementation of projects.
Earlier Dr Akram had stated that releases for the projects were often poor or delayed, hitting implementation of the projects. However, he added that the Planning Commission would have detailed action plan for physical inspection and monitoring of financial goals which would be closely watched so that releases follow the schedule.
The Minister said that implementation and capacity utilisation were inadequate. Now it is proposed to hold quarterly review of progress of projects and physical monitoring of implementation. This would be followed by six-monthly reviews under the president-ship of Prime Minister, he added.
Skill training is another priority area for quality production both in the private and public sectors. The government, he said, is the biggest employer but the private sector has to play much more active role in creating job opportunities. The government, he added, would provide new incentives to the trainees as well as the training institutes.
Pressed by newsmen to throw some light on proposed taxation in the budget, the Minister's response was brief. He said the number of taxes was not going to increase and gave the assurance that there would be "hassle-free" atmosphere for tax collection.
The current year's target of Rs 510 billion would be achieved, he said, but did not indicate next year's target which is said to be around Rs 576 billion or more.
Another feature of the Budget, he said, would be further rationalisation of tariffs.
In the past, tariff cuts were wrongly criticised for being done at the dictates of IMF and World Bank but eventually the economy benefited with considerable reduction in the tariff rates.
He said that it is proposed to further bring down tariffs on certain items and the number of slabs would continue. He added that protection to finished domestic products would be ensured.
Some bold measures for promotion of SMEs are also on the cards. Here, red tapism and end to bureaucratic hassle would be checked. Some reduction in general sales tax is also proposed.
During the question-answer session, the Finance Minister said that the rising trend in the interest rates would not cause any big problem because the loans on leasing accounts are not massive as was the case of South Korea where bank failures took place because the interest rates went up, the creditors defaulted in payment of higher instalments.
In Pakistan's case, he said he did not see any sharp changes. Rather, he visualised that interest rates would continue to be stable, and that loans by Pakistani banks were a minor fraction of the loan portfolio.
In response to the view expressed by an editor for having a permanent bureaucracy for local government for effective delivery system, Akram said that civil service reforms should take care of this important matter.
In response to observation of columnists that investors felt imperilled by the scrutiny of tax returns under the USAS, the Minister said that scrutiny of small percentage of returns was part of the scheme. The objective of the scheme is to facilitate investment and growth, he added.
The Finance minister shared a journalist's concern on disparities in income distribution despite significant improvements in the economy. He said that during the year foreign direct investment would be around one billion dollars because of the sale of cultural phone licences and privatisation proceeds.
He said that some new investment in green field projects is expected and would be announced.
He said he saw fast expansion in cement units, engineering goods units and a new tractor plant. These would benefit many, he said, but did concede that distribution of income was very difficult "but that's what the government is aiming at".
In his detailed presentation on success of economic policies in high growth trajectory, Dr Ashfaque said that policy objectives of the government were growth, macro economic stability, employment generation, improvement of social indicators, and a strong infrastructure.