Daily Times

Federal minister for planning, development, reforms and special initiatives Ahsan Iqbal on Monday said that economic growth in Pakistan requires strong fiscal discipline and economic management.

“We have to move towards export led growth and bring the tax to Gross Domestic Product (GDP) ratio closer to the countries of the region,” he said. He expressed these views while addressing the seminar on ‘Unblock Pakistan’s Economic Potential’ organized by Islamabad Policy Research Institute (IPRI).

He said that Pakistan was lagging behind the other countries of the region as our tax to GDP ratio had never been above 12pc.

He lamented that Pakistan was also lagging behind in exports as compared to other regional countries including India and Bangladesh.

Ahsan said that at present Foreign Direct investment (FDI) in Pakistan was only $1.5b while in Vietnam it was $30b. He pointed out that Pakistan’s savings and investment ratio was very low which needs improvement.

He said we have not paid attention to human resource development; the dream of economic development cannot be fulfilled on 50pc education. “We have to make our youth skilled and educated.

Because of the CPEC project, we got the attention of the world. The world wanted to invest here,” he said. We took $29b from China and we spent Rs2,300b on CPEC projects from our development program.

He said that we have given a lasting infrastructure to Pakistan. Ahsan Iqbal said that the government is budgeting the deficit at the moment and the current deficit is forcing us to take new loans.

He said we have set a revenue target of Rs7000b and in addition there will be 2000b non-tax revenue. Ahsan Iqbal said that this year we have to repay 4000b loans, in addition, Rs1,500b is our defence expenditure and Rs 500b is our government expenditure. He said that our annual pension expenditure is Rs530b of which our defence pension defence annual expenditure is Rs400b and civilian Rs.130b.

In addition, there is an annual development program of Rs700b while Rs1200b goes to our provinces. He said that the government is giving subsidies of Rs700b this year.

He said that in order to balance our annual budget, we have to move towards export led growth so that the country’s economy is sustainable and inclusive.