ISLAMABAD: As the government introduced its budget for the upcoming fiscal year, the business community representatives hailing from different sectors expressed reservations about its adverse impacts, saying it proposed no “realistic” measures to revive the national economy.

They said there was no direction to achieve any target and the budget would probably lead to the capital flight and human resources from Pakistan.

Speaking to Dawn, they said the ‘superficial measures’ would further deteriorate the financial condition of ordinary citizens.

Islamabad Industrial Association President Nasir M. Qureshi said the finance minister was a banker but he did not know that “industries do not make money by lending money” like banks.

Representatives say proposed measure to hurt economy, encourage flight of capital

“The manufacturing sector employs people, invests in plants and machinery, consumes electricity and gas; this is economy,” he claimed, adding, “It was much easier to make profits via long-term deposits in banks, but that does not generate employment or contribute to the economy.”

He said that developed countries, even the oil-rich Gulf states, encourage industrialisation to boost their employment rates.

“We oppose expanding the horizon of [social welfare programme] BISP – because it encourages seeking alms; people should be encouraged to learn skills and the SME [small and medium enterprises] sector should be promoted to employ beneficiaries of such aid programmes,” he suggested.

The restaurant industry is not happy with the budget either. Restaurants, Caterers and Bakers Association President Chaudhry Farooq said that the sales tax of 10 per cent on local supply of vermicelli, bread roll, rusk, poultry feed, cattle feed, sunflower meal, rapeseed meal, and canola meal would make chicken and other food items expensive.

“...the high cost of food and food business will eventually result in quality deterioration which will have a serious impact on the health of Pakistanis,” Mr Farooq said, also referring to the reports that almost 40pc kids were stunted in Pakistan.

“Governments all over the world give subsidies on food, not tax it,” he claimed.

He said the levy proposed on petrol would make the supply side costlier, adding that the ghee and oil rates have already been erratic due to several factors, including the volatile exchange rate. “The government does not understand that almost 50 per cent of Pakistanis live in urban and semi-urban, and they do not eat outside for fun or in luxury, but due to necessity,” he added.

Real Estate Federation Pakistan President Sardar Tahir Mehmood said that the budget was “unrealistic”, claiming it would encourage investment in real estate sectors, such as Dubai which has already hit $25 million over the last two years.

He claimed purchasing property in Pakistan had become a hassle due to taxation of up to 45 per cent on the sale and purchase of properties for non-filers. According to Mr Mehmood, the citizens did not want to become filers because they ‘feared’ the Federal Board of Revenue.

Ajmal Baloch, who heads All Pakistan Anjuman-i-Tajran, called out the government over its extravagant allocations, saying the federal government did not reduce its expenses or introduce measures to curtail corruption in its departments.

“With shrinking financial space the consumers will spend less and less and the traders will also suffer due to that; eventually, people will be forced to buy thrift clothes, shoes and other items – this is where the government want to take its citizens.”

Published in Dawn, June 20th, 2024