Budget strategy paper unrealistic, impractical

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LAHORE - Terming budget strategy paper 2013-14 as unrealistic and impractical, the business community has said that it does not contain measures to achieve macroeconomic targets.

They observed that the revenue target for next year has been set at Rs2.83 trillion which is unrealistic as the currents year target for revenue collection at Rs2.53 trillion was likely to be missed and hence revised it downward to Rs2.32 trillion. To achieve the new revenue target the government has to enhance tax net by bringing agri income into tax net.
They said that the finance ministry has been repeating to increase taxation by 0.5 per cent of GDP every year which was never materialised over the last five years. Therefore, setting similar targets for a future government is unrealistic, they added.

Criticizing the huge amount of Rs450 billion for public sector development programme for next year, they stated the amount should go for some large dams and big reservoirs to fulfill agricultural as well as energy requirements. The budget strategy paper should give a roadmap for resolving the issue of circular debt, making structural adjustments in energy sector and fast track completion of energy-related projects. They pointed out that revised fiscal deficit estimated at 6.5 per cent of the GDP for the current fiscal year was not based on facts and, therefore, target of 5.8 per cent of the GDP set for next year was unrealistic.

APAT general secretary Naeem Mir suggested the govt to continue subsidies for fertiliser, kitchen items and agriculture tube-wells but granting money to power sector without solid structural reforms is useless. Moreover, the provinces should start mega power projects due to sufficient funds under NFC Award.
He pointed out that the budget strategy paper does not contain effective measures for reducing the debt to GDP ratio by 0.7 per cent each year.
He was of the view that the objective of increasing exports by 4 per cent and foreign investment in excess of $5 billion also seem unrealistic, as no policy measures have been put in place when the country face serious energy shortages and security problem.

He blasted the government for not mentioning a single point for any austerity measure. The govt should avoid wrong budget estimates, as it would create hurdles in the way of the new government who may opt to present a mini budget in that case, he added.

Courtesy: The Nation

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