The Ministry of Finance on Friday rejected assertions that the unemployment rate can be as high as 8 percent this year due to prevailing economic conditions which are also wrongly described as leading to a reported loss of almost one million jobs, 24 percent hike in the prices of food items and further addition of 10 million people to those falling under the poverty line.
"These claims made without any corroborating evidence about the expected loss of jobs and higher unemployment rate are not based on facts since the latest labour force survey is not published yet, and a true picture would emerge only after latest facts and figures are available after their publication by the Pakistan Bureau of Statistics (PBS)," said a press statement issued by the Finance Division on Friday.
It said economic conditions are improving with each passing day and the payoff from ongoing stabilization efforts has already become visible in the form of improvement in key economic indicators like current account deficit which reduced by 72.0% during the period from July-January 2019-20.
It said workers' remittances increased by 4.1% , foreign direct investment grew by 65.7%, exports increased by 3.6% (provisional) during July-February 2019-20, fiscal deficit contained at 2.3% during July-December 2019-20, and significant rise recorded in Federal Board of Revenue tax revenues to Rs 2,731 billion (17.1 %) during July-February 2020.
"All of the above development is an affirmation of the government's success in stabilizing the economy and laying a foundation for robust growth", it added. Similarly, the claim of losing jobs and expected higher unemployment rate is also not based on facts as latest labour force survey is not published yet. Latest facts and figures would be available after its publication by the Pakistan Bureau of Statistics (PBS). However, it is worth mentioning that job creation is one of the key objectives of economic reform agenda of the government.
To boost up agriculture sector and increase employment opportunities in rural areas the federal government was implementing "National Agriculture Emergency Programme", it said adding that the government is providing a series of subsidies and incentives to industrial sector to boost jobs.
These include subsidies to industry for electricity and gas, export development package and continuation of provision of Long-Term Trade Financing (LTFF) and Export Refinancing Scheme (ERS) at subsidized rates.
The government had allocated an amount of Rs 125.184 billion for 10 Billion Tree Tsunami that would create two million jobs and Rs 6.0 billion had been released for this project.
Under Kamyab Jawan Youth Entrepreneurship Programme Rs 128 million has been disbursed till January, 2020 to youth to setup and expand business, besides Hunarmand Pakistan Programme of Rs 10 billion had been launched to facilitate the youth through skill development and so far Rs 1.5 billion had been released.
It said that State Bank of Pakistan (SBP) had enhanced the payment limits against freelance services in computer and information system from $5000/individual/ month to $25,000/individual/month.
This would also enable freelancers to expand their business or operations and engage new individuals to join the workforce. The PSDP has been increased from Rs 561 billion to Rs701 billion in fiscal year 2020 that would have multiplier effect on private investment, it said adding that PSDP authorization soared to Rs 4,64.7 billion (as on 28-02-2020) as against Rs 365.23 billion in last year.
With regard to inflation, the government is making all-out efforts to bring down inflation by ensuring smooth supply of commodities, checking hoarding, smuggling and undue profiteering. Further, vigilant monitoring of prices both at federal and provincial level had been ensured.
The recent data of inflation indicates that CPI inflation decreased by 1.0% on month on month in February 2020 over January 2020. However on year on year recorded at 12.4% in February 2020 over February 2019 and July-February CPI inflation reached to 11.7% (6.0% last year).
The present government has emphasized on price control through different policy, administrative and relief measures which included policy measures under which ECC allowed import of 0.3 million tons of wheat to decrease the local wheat price and meet the domestic requirement.
In order to control its prices, the ECC approved waiving 60% regulatory duty and 7% withholding taxes on its import. The ECC banned sugar export in an attempt to regulate the surging prices. The government had discontinued borrowing from the State Bank of Pakistan which had inflationary impact and switched to commercial banks for borrowing which was less inflationary in nature. The government had retired Rs 757.0 billion during the period from July-Feb, FY2020) as compared to borrowing of Rs 1,487.5 billion during the corresponding period of last year.
To contain fiscal deficit, there was complete restriction on supplementary grants to ease out inflationary pressures.
The SBP had raised policy rate to 13.25 bps since July, 2018 to compress aggregate demand and to control inflation. Besides the policy measures some administrative measures were also introduced that included Prices Monitoring Cell in Ministry of National Food Security, which is monitoring prices of essential food items.
The government was expanded the network of Sasta Bazaars and Utility Store outlets for provision of smooth supply of essential items. The Competition Commission of Pakistan (CCP) is taking effective measures to control Cartelization and undue Profit. The CCP has been directed to check anti-competitive practices and take prudent administrative measures for eliminating hoarding.
The positive impact of the above-mentioned measures of the government have been visible in form of declining trend in prices of food items such as pulses, fresh vegetables and wheat on monthly basis. The Sensitive Price Indicator (SPI) which monitored the price movement of 51 essential items on weekly basis recorded a decrease of 1.16% for the week ended on February 27, 2020. During the week, 13 items recorded a decline in their prices while prices of 25 items remained stable.
This was the third consecutive decline in SPI during the month of February 2020. To protect the poor segments of society a subsidy of Rs 226.5 billion has been allocated in the budget for customers who use less than 300 units of electricity in a month and an amount of Rs 131.9 billion released during July-Feb,2020.
Similarly, out of Rs 24 billion allocated for gas subsidy, Rs 15.5 billion had been released during July-Feb, FY2020.
In addition, subsidy to the USC has also been given in order to ensure availability of affordable basic food items to common man. Similarly, the claim with regard to poverty is not in line with the ongoing government's programmes and agenda to lessen the burden of policy adjustments/reforms on the common man and to uplift various sectors of the economy with an aim to achieve higher sustainable and inclusive economic growth.
Most importantly, the government has made various targeted poverty reduction interventions through Ehsaas programme, BISP, Sehat Sahulat programme, expanding the coverage of Waseela-e-Taleem programme, Tree Tsunami programme, Clean and Green Pakistan etcetera.
Under Ehsas, various programmes have been launched, including National Poverty Graduation Initiative under which 490,122 borrowers had been provided interest-free loans amounting to Rs 18.5 billion during July-January.
The government has launched 200,000 Ehsaas undergraduate scholarships programme of Rs 20 billion under HEC while BISP is providing unconditional cash transfers of Rs 5,500 per quarter to 5.02 million beneficiaries, with an annual budget of Rs 180 billion.
Tahafuz pilot project of Rs 55.00 million has been launched to provide financial assistance, legal aid and up-scaling of successful NGOs programmes. An amount of Rs 16 million has been released. Ehsaas Amdan (Income) Programme would provide assets to enable the underprivileged to start small businesses along with skills training and business planning. The total budget of the programme is approximately Rs 15 billion, it maintained.