ISLAMABAD: The government will present a “technocratic” and growth-oriented budget on April 27 for the next fiscal year instead of a politically populist budget, Prime Minister’s Adviser on Finance and Economic Affairs Dr Miftah Ismail said on Wednesday.

Talking to Dawn, Mr Ismail said the government has decided to take on board all major political parties for the upcoming budget ahead of the general elections.

“This will be a technocratic budget unlike the common perception that Pakistan Muslim League-Nawaz (PML-N) has planned to announce populist and politically motivated schemes and measures to win votes as the past governments have been doing,” said Mr Ismail.

Promises all parties to be taken on board for drafting a ‘technocratic budget’

“We will not present a political budget so that the federal government keeps functioning for a year,” he added.

He told Dawn that the government had already held first round of consultations with Pakistan Peoples Party (PPP) leaders Syed Naveed Qamar and Sherry Rahman and the budget schedule had been agreed upon.

This, he said, was also important because the PML-N believed based on all surveys that it would secure the next government and then would be able to adopt policies to implement its agenda.

“I will make sure we conclude the current fiscal year within 5 per cent fiscal deficit limit and reduce it down to 4.5pc next year,” he said, adding that even 5pc deficit was reasonable in a final year of any elected government.

He said the meeting with the PPP leaders was facilitated by the Speaker of the National Assembly Ayaz Sadiq.

The NA speaker will also invite the leaderships of major political parties very soon for a briefing on general contours and directions of the budget for broad based agreement, Mr Ismail added.

Before further consultations, the adviser said he would get the budget strategy paper (BSP) cleared by the federal cabinet.

He said the PML-N had the opportunity to present five budgets even though initial few years were efforts to stabilise the economy but there was no point to announce schemes and programmes for the sixth year that would come under the next government.

“No new development project will be included in the next year Public Sector Development Programme unless there is broad based agreement except for some critical projects for example Dasu Dam on which no party could have any objection”, he said.

He said the salaries of the government employees would go up as usual to absorb inflationary impact depending on the fiscal space but the real wage increase for all would be possible when we have a higher growth rate.

He said a 6pc GDP growth rate would be achieved this year despite projections by international financial institution for GDP growth rate at 5.5-5.6pc.

Responding to a question, Mr Ismail said the government would not introduce any new tax in the next year budget and yet achieve at least 0.3pc increase in tax-to-GDP ratio with additional revenue of about Rs120 billion based on 10pc increase in inflation and growth rate and by bringing into tax net about 300,000-400,000 fresh taxpayers.

He said the government was co-opting with National Database and Registration Authority (Nadra) for a potential 700,000 taxpayers and an exercise was currently in place to ensure that at least half of them come into the tax net next year.

Dr Ismail said as per desire of the Prime Minister Shahid Khaqan Abbasi, the government would reduce individual tax rates and exempt from income tax annual income worth Rs1 million because tax rate on annual income of Rs400,000 at present was unrealistic and a burden on poor segment earning Rs30-40,000 per month. They would continue to file tax returns, he said.

In response to a question, the adviser ruled out a reduction in other tax rates like 17pc General Sales Tax, saying that was not a consideration.

The adviser said even the 6pc growth rate was a healthy rate and the international financial institutions have been advising for slow down that led to imposition of regulatory duties on a series of import items early this year. “We are going to withdraw these growth affecting tax and duties to ensure that we move into the 7-8pc growth rate next year because they are slowing down aggregate demand”, he said.

He said the date for federal budget on April 27 was fixed to ensure that provinces also announce their budgets within the following eight days because the term of current assemblies has to expire on May 31 and all budgets have to be passed by the current assemblies.

Published in Dawn, March 15th, 2018