Pakistan Muslim League — Noon (PMLN)’s federal government, headed by prime minister Shahid Khaqan Abbasi, successor to disqualified Nawaz Sharif, stepped down on May 31, 2018. It successfully completed its stipulated five-year constitutional tenure, and became the second civilian democratic regime to earn this distinction, achieving accelerated economic growth through its vibrant, down-to-earth, and quite realistic policies in different sectors.
The PML-N federal government created another record by implementing an unprecedented early budget — the party’s sixth — on April 27, 2018.The party did this to ensure that it is presented, discussed, and passed, before Ramazan began. The federal budget with a total outlay of Rs 5932.5 billion, is a 16.2 percent jump from the 2017-18 budget. It included a good number of recommendations and suggestions by members of the upper house.
Alongside the government’s exit from office, the Ministry of Finance came out with big advertisements in newspapers highlighting five years of unprecedented economic performance. The ads presented comparative figures for 2013 and 2018.
The now former federal government came out with its achievements amidst hopes and expectations that it may be able to return to power. Prime Minister Justice (R) Nasirul Mulk is repeatedly reiterating his commitment towards a free and fair election; which adds to hope that the party may return.
PML-N hopes on winning the upcoming polls on the basis of what it claims to be its impressive economic performance during the time it was in power. If we look at the numbers, we can see their point. Gross Domestic Product (GDP) in real growth terms registered at 5.79 percent in 2017-18, the highest in 10 years as compared to 3.68 percent in 2012-13. The size of the national economy as such has also expanded to Rs 34,396 billion in FY 2018, showing an increase of more than Rs 12,000 billion. Per capita income also increased to Rs 180,204 in FY 2018 as compared to Rs 129,005 in 2013.
The PML-N federal government created another record by implementing an unprecedented early budget — the party’s sixth — on April 27
PML-N’s government followed a policy of fiscal consolidation in a determined manner because of which fiscal deficit came down to 5.5 percent of GDP this year against the somewhat high figure of 8.2 percent in 2013.
Inflation on average remained at 12 percent during 2008-13. It registered at 7.36 percent in 2012-13 specifically, and currently stands at 3.77 percent, which is less than half the rate of the PPP’s tenure.
The Federal Board of Revenue (FBR) is the country’s main agency for tax and duty collection, and revenue generation. During FY2012-13, FBR tax collection was recorded at Rs 1946.4 billion, FBR revenue generation stood at Rs 3935 billion during first ten months of the outgoing financial year 2017-18 i.e. July 2017 to April 2018. The tax to GDP ratio, which was 10.1 percent in fiscal year 2012-13, is expected to increase to 13.2 percent this year, official sources have maintained.
The agriculture sector is an important sector for the national economy, which somehow has not been performing well for some years due to various reasons. As a result of the policies pursued by the PML-N government, including incentives for the farming community, the sector has registered a growth of 3.8 percent — which is the highest rate seen during the last 13 years.
Disbursement of credit to agriculture sector, which was Rs 336.25 billion in 2012-13, has quite commendably increased to Rs 736.703 billion in ten months from July 2017 to April 2018 and is expected to cross Rs 800 billion when the current financial year closes, thus being more than doubled in five years.
The country’s imports have increased by 17 per cent in the first nine months of the outgoing fiscal year. These imports are augmenting productive capacity of the national economy for higher export volumes in the future. However, with the completion of the great game changer, China-Pakistan Economic Corridor (CPEC) related projects, currently under implementation and at varying stages of their completion in different parts of the country this year and the exchange rate adjustment, imports are expected to be reduced, to a moderate level.
Exports have been a challenging sector for the federal government, due to both internal and external factors. However, as a result of concerted efforts by all those concerned, things are improving. This includes announcements by the federal government in January 2017 of the Export Incentives Package of Rs180 billion, along with several incentives as well as exchange rate adjustments. Exports have shown a positive trend and are likely to close the outgoing fiscal year on a good note.
As for foreign exchange reserves, these stood at $11.020 billion in 2012-13 and after attaining record high in 2015-16, these are reported to be around $16.230 billion, inclusive of those maintained by the State Bank of Pakistan and the private commercial banks, in 2017-18.
Remittances from Overseas Pakistanis were $13.922 billion in 2012-13 and these have now risen to the level of $16.257 billion and likely to go up to more than $20 billion by end of June 2018. Foreign Direct Investment was $1.45 billion in 2012-13 and has touched the highest mark of $2.24 billion during 2017-18.
The federal government collects taxes and duties and these are distributed between the federal and provincial governments in accordance with the National Finance Commission (NFC) Award out of the Divisible Pool of Resources. The Transfer of Resources to the Provinces out of Divisible Pool stood at Rs. 1,299.498 billion in 2012-13 and these have in five years appreciably increased to Rs. 1,876.636 billion from July 2017 to May 15, 2018 and are likely to go higher at more than Rs. 2,230 billion by end of the current fiscal year.
Needless to mention, higher transfer of resources out of the Divisible Pool of Resources by the federal government to the provinces enabled them to spend more on financing their respective Annual Development Programmes (ADPs) for accelerated socio-economic growth.
The writer is Lahore-based freelance journalist, columnist and retired Deputy Controller (News) Radio Pakistan, Islamabad and can be reached at [email protected]
Published in Daily Times, July 1st 2018.