'With privatisation process picking up, poverty level dropping from 32 percent to 25 percent,' there is a visible improvement in the economy.' Advisor to Prime Minister on Finance Dr Salman Shah, stated this while speaking in a pre-budget seminar, here on Friday, he hinted that saving rates might be increased.
Talking of maintaining grants and subsidies on food items for masses, he said that Budget 2006-07 would be 'Awami', relief prone. There would be an enhancement in allowances for teachers in the forthcoming budget, he said.
Talking of Rs 200 billion subsidies set for the next budget, Salman Shah said that Rs 60 billion subsidy for power sector had been kept in it. Forecasting 7 percent Gross Domestic Product (GDP) rate in the fiscal year 2006-07, he said that this year's GDP growth rate would settle at 6.6 percent.
He hoped that inflation rate that currently stands at 8 percent would be brought down to 6.5 percent in the coming fiscal year. He stated that gasoline prices would however, finally determine this ratio.
Due to overall better economic situation prevailing in the country, Moody's ratings have gone up. He hoped that this situation would be instrumental in improving our ratings particularly with reference to poverty level.
Terming revenue collection targets achievement as excellent in the current fiscal year, he said that an amount of Rs 60 billion would be spent on the maintenance of law and order in the upcoming budget.
Dilating his view on country's foreign exchange reserves, he said that it currently stood at $13 billion mark. Pointing towards country's fiscal deficit level, he said that it presently remained at the level of 4.2 percent. 'Had tremor not hit the country, this level would have gone down to 3.5 percent', he pointed.
Referring to the ratio of trade deficit, he said 45 percent of it constituted of oil imports; 22 percent raw materials; 23 percent machinery and 9 percent consumer items, he added.
Salman pointed that import of machinery in the country would hopefully enhance productivity cycle, apart from ensuring more job opportunities. He hoped that with present healthy economic indicators, there would be better revenue generation and employment opportunities created in the forthcoming fiscal year.
Hinting at increase in saving rates in new fiscal year, he said that enhancement in banking interest rates would be detrimental to economic activity. He expressed his satisfaction over the performance of engineering sector in the country. He, however emphasised it was imperative to convert engineering sector into export industry.
Talking about engineering sector productivity, he said one million motorcycles and half a million cars would be rolled out in 2006-07. 'This will greatly help the vendor industry', he stated.
Referring to President Musharraf's statement that five mega dams would be constructed till year 2015, he disclosed that in next fiscal year, finances for purchase of land for their construction were being allocated. Asking for arriving at consensus on construction of new dams, he asked Chambers of Commerce to adopt resolutions in favour of new reservoirs. Supporting consumer banking in his address, he said it was successfully being practiced in a number of countries including the US. He told the gathering that there would be an increase in the salaries of government employees and increase in pension of pensioners in the forthcoming budget.
The Advisor referring to IMF in his address said that the country would not return to it. 'Pakistan has to manage its own resources', he pointed.
Minister of State Tariq Azeem dilating on the economic scenario stated that country had embarked on a right track of development and the results of this had started coming up, he added.
He dilated that there was hope for masses in the next budget and a number of measures were being taken in that direction, he pointed. Azhar Saeed Butt, Aftab Vohra, Colonel Ikram Ullah, Azhar Hameed, Ameen Mughal and others attended the seminar.