Prime Minister Shehbaz Sharif has rightly remarked recently

“Till when we would keep on going with a begging bowl?” Indeed this is a thought provoking remark for the whole nation to ponder with seriousness. Unfortunately, even the yearly Budget is balanced with foreign borrowing. Let us ponder on the National irritants and effective measures. Taxation is not the only resource for economic boost.

There are many other resources and factors to rationalize national economy vitals. Pakistan has tremendous resources to contribute to be a big economic power.

Our sixty percent youth power, fertile agriculture, water resources, sizeable export potential, technical personnel, valiant armed forces for peace are vital positive parameters to make Pakistan a strong economy with good national leadership. Taxation gives rise to higher inflation and miseries for the poor. Let us glance at the model depicting some current economic issues to be addressed.

Real economic growth — a vital factor

Going for real economic growth against nominal growth can be highly effective in curing National Economy ailments;

Caroline Banton, a well-known economist stresses on real economic growth as distinct from nominal growth.

The real economic growth, or real GDP growth rate, measures economic growth as it relates to the gross domestic product (GDP) from one period to another, adjusted for inflation, and expressed in real terms as opposed to nominal terms.

The real economic growth rate is expressed as a percentage that shows the rate of change in a country’s GDP, typically from one year to the next. Another economic growth measure is the gross national product (GNP), which is sometimes preferred if a nation’s economy is substantially dependent on foreign earnings.

Why use the real GDP growth rate?

The real GDP growth rate is a more useful measure than the nominal GDP growth rate because it considers the effect of inflation an economic data. The real economic growth rate is a “constant dollar” figure and, therefore, avoids the distortion from periods of extreme inflation or deflation and is a more consistent measure.

Using the real GDP growth rate

A country’s real economic growth rate is helpful to government policymakers when making fiscal policy decisions. These decisions might be applied to spur economic growth or control inflation. Real economic growth rate figures serve two purposes.

First, the real economic growth rate figure is used to compare the current rate of economic growth with previous periods to ascertain the general trend in growth over time. Second, the real economic growth rate is helpful when comparing the growth rates of similar economies that have substantially different rates of inflation.

A comparison of the nominal GDP growth rate for a country with only 1% inflation to the nominal GDP growth rate for a country with 10% inflation would be substantially misleading because nominal GDP does not adjust for inflation.

Effective corrective measures

This is the real issue in remedying the National Economy ailments. In this connection Peter Drucker, a well-known management global expert, can help effectively. His PDCA cycle – an effective management technique needs to be used. PDCA conveys P for planning, D for Implementation of a plan, C for checking implementation and stands for actions to correct checking implementation.

There is therefore a need to set up task forces to correct the economy’s ailments. The task forces may follow the PDCA cycle strategies to show effective results and to develop the national economy in order to achieve economic growth in real terms.

Task forces

The proposed Task Forces would be vital agents to revitalise the national economy. Firstly, the heads of task forces should be competent experts to be nominated by the government. The heads of the groups would be given specific terms of reference for each task, methodologies and delivering periods.

On completion of the tasks, heads of the task forces should be made responsible to implement the action plans and show results in the given time frames and terms of reference. The implementation of tasks have to be given financial and management resources to deliver results in the specified time frame.

This methodology alone can place the national economy on a strong footing to get rid of the national begging bowl for the annual national revenue and capital Budgets. This will also help get rid of the mounting national debt effectively.

Copyright Business Recorder, 2022