Strong private sector is only guarantee of prosperity
KARACHI: Federal Minister for Finance and Economic Affairs, Dr Abdul Hafeez Shaikh on Sunday said that the Government genuinely believed that private sector is the engine for creating jobs, resources mobilization, economic growth and development in the country.
The Government would be extending all kinds of support and facilitation to private sector and taking on board while making important economic decisions, he said.
He was speaking during an interactive session with members of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) here.
Federal Secretary for Finance Wajid Ahmed Rana, Chairman, Federal Board of Revenue and a group of senior officers of FBR accompanied him.
He said that for providing relief to the common man, it is very imperative to strengthen private sector that can provide jobs and contribute in development of the country. That, tax burden on the common man be minimized.
He said that he had come to FPCCI with open mind to listen, discuss and find the solutions of the problems facing trade and industry.
He said the GDP growth target for this year will be 3.7 per cent against the last year’s 3 plus per cent.
To a demand of reducing the sales tax rate to a single digit, the Finance Minister said that his ministry had to maintain the same but the problem lied on the business community side.
“We engaged with you people but failed to reach an understanding on the issue. You people should settle the issue and come up with a single rate. I will be the happiest person on one rate of Sales Tax,” he asserted.
Highlighting the achievements of the PPP-led Government, Dr Abdul Hafeez Shaikh said that Federation has transferred 70 per cent of resources from the divisible pool to the provinces against 46 per cent in the past. In addition, Rs 800 billion addition were given to the provinces for the developing better infrastructure and maintain law and order.
“Federation is now sacrificing for the provinces,” he said.
He said that for supporting the poor families especially those headed by women, the Government had launched Shaheed Mohtarma Benazir Bhutto Support Program and more than 1.2 million had so far benefitted.
Deliberating on energy issue, the Minister said that during last four years the Government had given subsidy of Rs1,000 billion to cover the gap of production cost and sale price of electricity.
Another Rs 100 billion subsidy would be given this year.
Now, he said, the Government has three options to manage the electricity crisis: to sell electricity on the actual price which is higher than what is charged; levy more taxes; conservation of electricity.
The best available option for us to conserve the electricity and gas, he said adding that input use has tilted in favour of import of oil. It has become very difficult to produce power. For next 6 or 12 months, we would have to adopt short-term solutions till alternate energy projects are completed and come into function.
Vice Chairman of Confederation of South Asia Chambers of Commerce and Industry, and former president FPCCI Tariq Sayeed urged that Federal Minister for Finance and Economic Affairs along with his team should visit FPCCI at least in three months.
He said that at least five per cent economic growth be targeted in the next annual budget, sales tax should be reduced to single digit. This will eliminate fake invoicing and other mal-practices, and the Government will have more revenue.
He proposed that like for the Stock Exchanges, an incentives scheme should be announced for the industrial sector for its revival and the future expansion.
The role of public sector in industrial and development should be reduced and the private sector should be supported and facilitated to maximum possible extent, he emphasized.
He suggested that besides going for maximum small and big projects of energy, the existing power projects must be better managed to narrow the demand and supply gap of energy.
He recommended that dispute resolution tribunal should empowered to escape avoid litigation on business issues.
Acting President FPCCI Shaikh Shakil Ahmed Dhingra briefed the Minister on the problems facing trade and industry.
President, Pak-India Chamber of Commerce and Industry, and former president FPCCI, SM Muneer called for effective steps to contain the increasing smuggling.
Member of National Assembly Shireen Arshad Khan said that the Government should extend more support to small and medium enterprises as the SMEs are the only answer to a country’s economic prosperity.
Chairman, FPCCI Standing Committee on Exports, Dr Mirza Ikhtiar Baig suggested that the duties on industrial raw materials be withdrawn to encourage industry. That, State Bank of Pakistan’s monetary policy be reviewed and softened as no investor can afford 15 per cent mark-up.