Federal budget: Govt has not as yet started

KARACHI: Irfan Iqbal Sheikh, President FPCCI, has expressed his profound concerns that the government and its economic team had not yet started the consultative process with the business community in general and the FPCCI in particular. Less than a month is left in the announcement of budget as it has been slated for presentation on 9th June.

President FPCCI has invited Federal Minister for Finance and Revenue Ishaq Dar to meet the leaders of business community to take stock of their proposals vis-a-vis federal budget 2023-24 and also listen to their issues, apprehensions and recommended solutions.

Irfan Iqbal Sheikh explained that FPCCI wants to discuss its proposals on industrial, trade, shipping, transportation, taxation, SME, agriculture, IT & ITeS, monetary and fiscal policies with the government.

The FPCCI chief also expressed his shock that IMF has resorted to arm-twisting as it has raised for no reason – the external funding requirement from $ 6 to $ 8 billion, sensing that the friendly countries have promised up to $ 5 billion in funding or roll-overs to Pakistan and Pakistan is pretty close to fulfilling the last condition and was asking for a relaxation of only $ 1 billion, when the target was $ 6 billion. This is unfair and unethical and the international community must take notice, he added.

He questioned the IMF that the stalled EFF programme was valid only till June 2023, but, contradictory to that, they have suddenly raised the external funding requirement from $ 6-$ 8 billion for the next 7 months. It has no justification and it tantamount to undermining the whole budget-making exercise of a country of 230.1 million.

Irfan Iqbal Sheikh has emphasised that the government’s economic and financial team must be crystal clear now that IMF programme is not going to materialise before the upcoming budget – which is only three weeks away and the government must prepare its budget accordingly.

We, at FPCCI, have been observing that the government was making its budget on the basis of a resumed IMF programme but given the fluid circumstances, it now has to make major adjustments in the budget within the short period of three weeks, he added.

He maintained that only solution that can steer Pakistan out of the crisis is indigenous with few basic principles: (i) simplification & broadening of the tax base; rather than squeezing the existing tax filers and harassment of the business & industry; (ii) targeted subsidies to the five export-oriented sectors (i.e. Textiles, IT & ITeS, Leather, Sports and Surgical Goods) in electricity & gas tariffs and making it competitive through regionally competitive energy tariff (RCET) mechanism as exports earnings can manage the dearth of dollars in the country; (iii) encourage remittances through bridging the gap between banking channels and open markets and protecting the assets of overseas Pakistanis in the country; (iv) incentivize industrialisation, export substitution and revival of sick units; (v) make all economic policies in consultation with real stakeholders of the economy i.e. business, industry and trade community of Pakistan; (vi) all political parties must sign a national economic agenda and plan for the next 15 years to ensure continuity of economic policies and protect it from political meddling.

Copyright Business Recorder, 2023

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