All promises, nothing new in budget 2013-14

Federal Finance Minister Ishaq Dar while delivering budget speech in the National Assembly here also announced improvement in tax collections and reduction in non-development expenditures. “We are starting our journey from very precarious situation, however  the bad condition of economy has boosted our courage to lead it towards its desired heights of sustainability,” he said.

The previous government, he said, had not looked after the economy in accordance with the national interests. The minister said that the nation has made better accountability by rejecting those who did not deliver in past five years. He said that GDP growth remained below 3 percent and if compared with  the population growth of about two percent, the real growth would stand at just one percent. He said that inflation has remained at 13 percent which is highest  during the past 4 decades while the foreign exchange reserves have fallen from $11.1 billion to $6.3 billion. He said that the newly-elected government would fulfill all its  promises it had made during the election campaign, saying that the budget for fiscal year 2013-14 was the manifestation of the same pledges. He introduced Economic Vision that would lead the country towards sustainable economic growth. He said that the first priority of the government would be to make the country self-reliant, saying, “We need self-reliant economy to run the affairs of the country.” He said that the government would not involve in over-spending as the previous government has miserably failed to follow this policy which caused huge damage to the economy. He was of the view that doing business was not the job of the  government so it would make the private sector center of economic activities and introduce reforms in the market system. He said that the government would not involve in business, however, it  would only intervene in sectors where private sector has limitation particularly in education, health, population and huge infrastructure development sectors. He said that the government would also improve infrastructure particularly in the energy sector.

The Finance Minister said the government introduced the concept of a medium term plan for improvement of economy. According to Medium Term Macroeconomic Framework (MTMF), by 2015-16, Gross Domestic Product (GDP) rate would be increased to 7 percent, inflation will be brought down to single digit, investment to GDP will be increased to 20 percent and fiscal deficit will be reduced to 4 percent. While describing the salient features of Public Sector Development Programme (PSDP), he said Pakistan has abundant water resources and it inherited a countrywide system of irrigation and dams at the time of partition, followed by building of Mangla and Tarbela dams which are lifeline of economy. The government has allocated Rs59 billion for water projects including expansion of Mangla and Tarbela dams, Diamer-Bhasha Dam, Gomal Zam Dam and various other dams and irrigation projects, he added. The Minister informed the House that Rs225 billion have been allocated for energy sector in which Rs160 billion was allocated in the PSDP and Rs65 billion revenue would be generated by Gencos and Discos. Funds have been allocated for Neelum Jhelum Dam, Thar coal, Chashma nuclear power plant, modernization of power stations and building of grid stations, he added. The Minister said the federal government would provide Rs21 billion to the health sector for programmes of immunization, mother child care, family planning, reduction of blindness, and other national programmes. The federal government, he said, would also assist the provinces in population welfare projects. Ishaq Dar expressed disappointment that during the last five years, investment in industrial sector decreased and the sector grew on average only 1.8 percent. The industrial sector is the mainstay of the economy and engine of economic growth and job creation, he said adding, laws would be improved to make the export processing zones more attractive for investors and Special Industrial Zone in Gwadar would  be given more incentives. Calling human resource development vital for the national economy, he said total allocations for development of human capital would be Rs57 billion and Rs18 billion is allocated for higher education. According to a study, number of students in higher education will increase from one million to 1.2 million and 6200 scholarships would be provided to bright students. Referring to the building of unprecedented Islamabad-Lahore Motorway by the PML-N government in 1997-99, the Finance Minister said Rs63 billion have been allocated for building of highways and roads. He said roads in far flung areas, link roads and farms to market roads are essential to create economic opportunities and alleviate poverty. One of the government’s main strategic project would be to link Gwadar Port to the Northern Areas making Gwadar a gateway to Central Asia and access point for markets of Europe, the Minister said. He said Rs31 billion was allocated for railway to improve a mode of transportation, which was remarkable at the time of partition, but now it is in shambles. “Destruction of railway is not acceptable for us,” he remarked. He said governments around the world were making investments in railway as it was considered environment friendly but here in Pakistan, railway affairs were in a bad state due to lack of resources, falling revenues and absence of double tracks. The minister said the state of affairs is so bad that government allocates Rs34 billion for pay and pension of the railway employees every year. Pakistan Railways is not a poor department and it connects the far flung areas of the country but there is a need to considerably improve its working, he added. He said the railway employees were disappointed but the problem was not of resources and things could be changed through leadership and vision. “We are determined to restructure railway and rebuild it as a grand department.” With a law of Parliament, Pakistan Railways would be turned into a corporation run by a board of directors, comprising professionals and experts.