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LAHORE: Prime Minister Raja Pervaiz Ashraf has appealed to the nation to unite for the country’s good as it is the only way to tackle the economic challenges faced by Pakistan, while addressing the members of the Lahore Chamber of Commerce and Industry (LCCI) here on Tuesday.
“Yes the economic crisis is severe and we will have to work hand in hand to resolve it,” he said, adding that the government has been trying to improve the economy and inflation has been brought down to a single digit, while revenue has doubled in the last four years.
He conceded that the law and order situation is impeding economic growth, while the energy crisis has reduced industrial productivity. “We have resolved to treat every province equally in supply of electricity” he said, praising the resilience of the Pakistani entrepreneurs who have braved energy shortages and adverse law and order and still survive.
“We are fully committed to increasing trade with India,” he said, adding that the government would facilitate Pakistani businessmen in exporting goods to India. “Let me assure you that the interest of the domestic industry would be fully protected while doing trade with India,” said Ashraf. He also assured local industrialists that strict vigilance would be kept on Indian imports to eliminate the chance of dumping their goods in the country in order to hurt the local manufacturers.
Regarding the Kalabagh Dam, he said that it is not possible to build it under the present circumstances. The dam was not built even during the tenure of autocratic regimes,” he said. “We should discuss doable projects and leave the Kalabagh Dam aside till the time that all the provinces agree to its construction.”
He added that Thar coal was discovered decades back but the incumbent government has provided funds for its development. “Besides Dr Samarmand, a few foreign firms have started exploratory work at Thar coal. The initial findings are encouraging but it would take some time before actual deliveries start,” he said.
Meanwhile, Dr Abdul Hafeez Sheikh, who was also present at the meeting, said that when the Pakistan People’s Party assumed power, the economy had already declined. In fact, he added, the decline was so rapid that it took two years to bottom out. “Unfortunately the high global commodity and oil rates further aggravated the situation.”
“While the economy was steeply declining, the inflation rate reached 25 percent –the highest in history – by October 2008,” he said, adding that it has now been reduced to a single digit through prudent fiscal management and austerity measures.
“The federal government has maintained strict financial discipline,” he claimed. He added that the federal government expenditure, after debt servicing, security-related and salary increase expenditures, has increased on an average by six percent. “In real terms the federal expenditure has declined, considering the double-digit inflation the country faced for almost four years,” he observed. “The provincial expenditures have, however, increased by 20 percent during this period and the federal government has no control over them.” Sheikh admitted that the tax-to-GDP ratio has been low but the government increased it by 0.5 percent last year when all potential tax avenues had been transferred to provinces. “The government has placed emphasis on tax compliance and has rewarded honest taxpayers by lowering the tax slabs from 17 to seven,” he said. “Almost every taxpayer has benefited from this measure in the form of reduced tax burden.” Earlier, the LCCI president in his welcome address, pointed out that the survival of industries is at stake in Pakistan due to multiple reasons. “Besides energy issues, the availability of cheap smuggled goods is a grave threat,” he said. “We need to tackle this problem at various ends, including reduction in custom duties, tightening border surveillance and enforcement of customs laws and regulations at entry points.”
Before the arrival of the prime minister, Federal Board of Revenue Chairman Ali Arshad Hakeem offered the LCCI to join hands with the customs department to develop a land port at Wagah border. According to him, section 153-A of Income Tax Ordinance 2001 would be kept in abeyance till 2013 and new notices would be issued to businessmen.
“Yes the economic crisis is severe and we will have to work hand in hand to resolve it,” he said, adding that the government has been trying to improve the economy and inflation has been brought down to a single digit, while revenue has doubled in the last four years.
He conceded that the law and order situation is impeding economic growth, while the energy crisis has reduced industrial productivity. “We have resolved to treat every province equally in supply of electricity” he said, praising the resilience of the Pakistani entrepreneurs who have braved energy shortages and adverse law and order and still survive.
“We are fully committed to increasing trade with India,” he said, adding that the government would facilitate Pakistani businessmen in exporting goods to India. “Let me assure you that the interest of the domestic industry would be fully protected while doing trade with India,” said Ashraf. He also assured local industrialists that strict vigilance would be kept on Indian imports to eliminate the chance of dumping their goods in the country in order to hurt the local manufacturers.
Regarding the Kalabagh Dam, he said that it is not possible to build it under the present circumstances. The dam was not built even during the tenure of autocratic regimes,” he said. “We should discuss doable projects and leave the Kalabagh Dam aside till the time that all the provinces agree to its construction.”
He added that Thar coal was discovered decades back but the incumbent government has provided funds for its development. “Besides Dr Samarmand, a few foreign firms have started exploratory work at Thar coal. The initial findings are encouraging but it would take some time before actual deliveries start,” he said.
Meanwhile, Dr Abdul Hafeez Sheikh, who was also present at the meeting, said that when the Pakistan People’s Party assumed power, the economy had already declined. In fact, he added, the decline was so rapid that it took two years to bottom out. “Unfortunately the high global commodity and oil rates further aggravated the situation.”
“While the economy was steeply declining, the inflation rate reached 25 percent –the highest in history – by October 2008,” he said, adding that it has now been reduced to a single digit through prudent fiscal management and austerity measures.
“The federal government has maintained strict financial discipline,” he claimed. He added that the federal government expenditure, after debt servicing, security-related and salary increase expenditures, has increased on an average by six percent. “In real terms the federal expenditure has declined, considering the double-digit inflation the country faced for almost four years,” he observed. “The provincial expenditures have, however, increased by 20 percent during this period and the federal government has no control over them.” Sheikh admitted that the tax-to-GDP ratio has been low but the government increased it by 0.5 percent last year when all potential tax avenues had been transferred to provinces. “The government has placed emphasis on tax compliance and has rewarded honest taxpayers by lowering the tax slabs from 17 to seven,” he said. “Almost every taxpayer has benefited from this measure in the form of reduced tax burden.” Earlier, the LCCI president in his welcome address, pointed out that the survival of industries is at stake in Pakistan due to multiple reasons. “Besides energy issues, the availability of cheap smuggled goods is a grave threat,” he said. “We need to tackle this problem at various ends, including reduction in custom duties, tightening border surveillance and enforcement of customs laws and regulations at entry points.”
Before the arrival of the prime minister, Federal Board of Revenue Chairman Ali Arshad Hakeem offered the LCCI to join hands with the customs department to develop a land port at Wagah border. According to him, section 153-A of Income Tax Ordinance 2001 would be kept in abeyance till 2013 and new notices would be issued to businessmen.
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