KARACHI, Jan 3: The government plans to unveil a major policy initiative on Jan 9 to address the cross-subsidy issue, and structural and sector-wise distribution matters relating to gas and petrol, Prime Minister’s Advisor on Finance Shaukat Tarin informed industrialists on Saturday afternoon at a meeting organised by the SITE Association of Industry.

“A special meeting of the Economic Coordination Committee (ECC) of the Cabinet is being convened to decide on the announcement of committees in this regard. The committees will have representatives from trade bodies,’’ Mr Tarin is reported to have conveyed to industry leaders after his formal meeting.

In another context, he hinted at an integrated energy policy coming out in a foreseeable future to take care of gas, petrol and electricity as leaders of industry complain of increasing burden on the manufacturing sector from high interest rates and spiraling utility tariffs.

He did not mince words to concede that Pakistan is now passing through a negative growth phase which has caused unemployment and other social and economic problems. But he stoutly defended the banks’ spread issue raised by senior business leader Mr Siraj Kassem Teli, who called it a mother of all economic woes which made a crippling effect on the manufacturing sector as well as on exports.

Finally the advisor won hearts of all the charged and hostile industrialists by declaring that henceforth private sector would be given representation on policy boards of concerned government organisations, and that “you will be a part of every policy forming process.’’

In his address of welcome, the chairman of SITE Association of Industry, Engineer M A Jabbar, demanded a censure of the outgoing Governor of State Bank, Dr Shamshad Akhtar, who he blamed contributed to accumulation of macro-economic imbalances, particularly in the election year.

With an increase in the financing cost, the industry today groans under low gas pressure, unreliable electric supply, rising utility tariffs and growing lawlessness.

“To add salt to the injury no one responds when effort is made to seek attention,’’ Jabbar complained while referring to his disappointment when the Sui Southern Gas Company ignored his petition which sought a schedule for gas load-management.

He termed the GST an anti-industry and wondered as to how government would be able to comply with the condition of the International Monetary Forum (IMF) to attain a 15 per cent ratio of tax-to-GDP when economy is shrinking and growth is declining. Zubair Motiwala, a former chairman of SITE Association, expressed fears that existing tax-payers would be asked to share the additional burden of taxes.

“Our agreement with the IMF stipulates growth in ratios rather than in absolute numbers on increase in tax revenue,’’ Shaukat Tarin explained to point out that even a reduction in tax collection may obtain stipulated 10.2 per cent of tax to GDP ratio in the current fiscal year.

“We are coming out with a new tax policy,’’ he declared and said that the new tax policy will be prepared in consultation with all stakeholders and on one principle that all those who earn a certain level of income should pay tax, no matter what he or she does.

“We will unearth new potential tax-payers,’’ he said to point out strategy to broaden tax base.

“We will first serve a normal notice and then proceed according to law if we do not get any response,’’ he made it clear.

He recalled that way back in 1999 the tax-to-GDP ratio in Pakistan was 13.9 per cent.

He reminded the industrialists that much blame of the present level of inflation falls on previous government which preferred giving un-budged subsidy on a number of items in an election year and gathered almost Rs400 billion fiscal deficit.

“We are still struggling to come out of the hangover of the phenomenal monetary expansion of previous years,’’ he said.

Tarin declared that productive sectors—agriculture and industry—are being focused by the present government to take up a growth path after attaining fiscal stabilisation.