The reconstituted think-tank set up by the Prime Minister under the chairmanship of Advisor to the Prime Minister on Finance, Dr Hafeez Sheikh, met for the third time and proposed six priority domains including (i) boosting social safety nets (Ehsaas programme), the Prime Minister's signature pre-Covid-19 programme targeting the poor and the vulnerable that has witnessed a boost post-Covid-19 through including the daily-wage earners, more particularly the implementation of the Prime Minister's 1.2 trillion rupee stimulus package with a view to ensuring value for money and smooth delivery to the poor and the vulnerable; (ii) food security and safety of supply chains (critical post-Covid-19) as there is concern that supply chains may be disrupted due to lockdown (smart or otherwise); (iii) kick-starting low and medium cost housing (again the Prime Minister's signature programme pre- as well as post-Covid-19); and (iv) making Public Sector Development and provincial development programmes labour-intensive propositions, especially after massive lay-offs due to the contractionary fiscal and monetary policies agreed with the International Monetary Fund (IMF) pre-Covid-19 that stifled aggregate demand, a trend that was exacerbated post-Covid-19.

Another domain that came under discussion related to changes in specific taxes that it was agreed must be deliberated upon with the Federal Board of Revenue (FBR) - a proposal that must be fully supported as without consultations with the tax collecting agency there is a danger of setting 'unrealistic' targets. This is precisely what occurred during the current year when Pakistani authorities agreed to an unrealistic 5.5 trillion rupee pre-Covid-19 target which was later revised down to 4.6 trillion rupees by FBR though the IMF reportedly insisted on 4.9 trillion rupees during the now stalled, Extended Fund Facility programme's second mandatory review. Post-Covid-19, the FBR has projected a tax target of 3.9 trillion rupees for the current year.

And finally, the sixth domain relates to the financial and banking sector that is targeted to play a pivotal role in refuelling economic activity through providing subsidised credit for the hard hit sectors particularly with respect to micro finance and facilitating remittance inflows with the overall objective of providing the necessary liquidity to jump start the economy.

It may be recalled that the first think tank set up by Prime Minister Khan, titled Economic Advisory Council died a natural death through not being summoned after the appointment of Dr Hafeez Sheikh as Advisor to the Prime Minister on Finance. The new reconstituted think tank's second meeting discussed the discount rate of 9 percent as being too high, a rate that does militate against any attempt to fuel aggregate demand, a critical objective post-Covid-19 which perhaps explains why Dr Hafeez Sheikh is reported to have stated that the economy is under acute stress due to demand and supply compression and there is a need to identify measures to boost the economy. If Sheikh's statement is taken in conjunction with the recommendation to reduce the discount rate made during the second meeting of the think tank then one would assume that indirectly he is supporting the think tank's recommendation.

In this context, it is relevant to note that Governor State Bank of Pakistan, in another meeting with Dr Hafeez Sheikh in the chair, maintained that the growth rate would be between negative 0.5 to negative 1.5 percent if the lockdown continues for 3 months but that the growth rate would plummet further - between negative 2 to negative 3 percent - if the lockdown stretches to six months. It is unclear whether the projections by the SBP take account of the smart lockdown as the government has allowed several industries exemption from lockdown with a view to fuelling economic activity. The basis of the SBP projections was credit data and Google analytics. One may safely assume that credit card data may not reflect any sizeable portion of total private sector consumption given our large undocumented economy with a large portion of the documented sector using cash and/or cheques as opposed to credit cards for consumption purposes. And reliance on Google analytics to determine a decline of 50 percent in commercial activities in Pakistan reflects a lack of alternative available to the SBP. In recent months there has unfortunately been heavy reliance on data collected by sources outside the country and one would hope that the SBP as well as the Pakistan Bureau of Statistics begin to focus on strengthening their own capacity so that this reliance may be minimised.