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ISLAMABAD: Prime Minister Yousuf Raza Gilani has asked his economic team preparing next year's budget to focus on job creation for youths, provision of basic services like health, education, clean drinking water and civic amenities to people and sustaining growth.
A meeting he held with his Finance Adviser Dr Abdul Hafeez Shaikh on Tuesday decided that the “budget must continue with the approach of preserving economic stability, checking inflation and creating jobs while protecting the vulnerable groups through social safety net programmes”.According to an official statement, the decision was taken after a detailed briefing by Dr Shaikh on the state of economy and global challenges, especially in the Euro zone, and their possible impact.
The prime minister was informed that national economy had shown remarkable resilience in the face of global recession, terrorism and unprecedented floods in Sindh.
Dr Shaikh said tax revenue up to Feb 17 had shown an increase of 26 per cent over the same period of last year due to expansion of coverage, better enforcement and administrative measures. The exports and remittances also remained strong in the first seven months of the fiscal year.
The prime minister was informed that funds had been released for the Public Sector Development Programme (PSDP) in accordance with the plans and there would be 100 per cent utilisation of the allocated Rs300 billion.
The government continued to remain fiscally prudent and its expenditures had been in control, Dr Shaikh said.
He later presided over a meeting attended by the deputy chairman of the Planning Commission, chairman of the Federal Board of Revenue, secretaries of finance and economic affairs and officials of the finance ministry.
The meeting was informed that during the past seven months inflation stood at 10.7 per cent as compared to 14.3 per cent during the same period last year because food inflation had dropped from 19.3 to 11.5 per cent.
The official statement said exports had increased by 7.2 per cent, but it contradicted figures released by the Federal Bureau of Statistics that put the seven-month export growth at 0.25 per cent.
Foreign remittances registered a growth of 21 per cent, resulting in foreign exchange stability at $16.8 billion.
The finance secretary told the meeting that fiscal deficit had been contained to 3.1 per cent of the GDP from July 2011 to Jan 2012. The figure in the corresponding period of the previous year was 3.4 per cent. However, off-budget transfers for power sector and other subsidies were not included in the figure.
He said FBR's collection had increased to Rs975 billion from Rs770 billion.
Total federal expenditure was contained at 53 per cent of the budget against a target of 58 per cent as a result of an austerity drive.
The total federal development releases during the seven months amounted to Rs202 billion, including foreign project aid disbursement of Rs60 billion. This also contradicted Planning Commission's figures that had reported Rs118 billion releases made by Feb 17.
The adviser called for continuing efforts to maintain fiscal austerity, revenue mobilisation reforms and completion of development projects and keeping a vigil on all economic fronts in the face of global recession while preparing the budget.
