Prime Minister Syed Yousuf Raza Gilani said that due to prudent economic policies of the present government, number of targets in economic sector have been achieved during the first six months of the current fiscal.
Giving a policy statement in the National Assembly on the economic situation of country during the first six months, the Prime Minister said despite facing challenges of floods, rains and deteriorated law and order situation and world economic recession, the economic indicators of Pakistan improved during this period and inflation has been reduced to single digit.
Gilani said political stability is must to ensure economic stability and urged the media to play important role in this regard. The Prime Minister said although the government had inherited economy from the previous government in poor condition but the economic reforms by it have started showing results. The Prime Minister said the government controlled borrowing during the first six months of this fiscal year that helped to reduce the inflation to single digit (9.7) first time in history of the country. He said the expenditures are under control with only 45 percent utilization in this sector during first six months. The Prime Minister said that fiscal deficit which was 9.4 percent has been reduced to 7.6 percent and the inflation that had reached 25 percent but has been reduced to 9.7 percent during December 2011.
Gilani said the government provided a number of incentives to farmers that improved the food supply situation in the country. It was made possible with the help of less budget deficit and reducing the loans from State Bank of Pakistan. He said the prices of essential items were reduced in the open market the food inflation which was 20 percent in last year, remained in single digit during the first six months of the current fiscal year.The Prime Minister said the deterioration in the industrial sector has stopped and the industry is making progress. He said the GDP growth rate will be 4 percent basically due to the enhanced agricultural production. Referring to the improvement of different crops, the Prime Minister especially mentioned that cotton crop is expected to yield 14 million bales during this year and other industries like textile, cement and automobile are playing important role in over all improvement in industrial sector. He said tax net has been increased and major exemptions have been abolished and every one is being taken to tax net. Highlighting the achievements in tax collection, the Prime Minister said the tax collection during July-December 2011 remained Rs. 841 billion which was 27 percent more as compared to correspondent period and it is unprecedented. He said, “Keeping in view this achievement, we hope and confident to achieve the tax revenue target of Rs. 1952 billion during the current fiscal year.” The Prime Minister said the government remained very cautious in its spending and adopted a policy of austerity.
He said expenditures are well in the control of the government and during July-December 2011, the government spent only 45 percent from its expenditure budget.
The Prime Minister said despite the policy of austerity, the government gave full attention to different sectors under Public Sector Development Programme.
He said under this programme, the government released Rs. 114 billion for the development of government sectors out of the allocation of Rs. 300 billion for the current fiscal year. He said Mangla upraising project, Gomal Zam Dam, Chashma-2 and N-55 projects have been completed during this period.The Prime Minister said other areas of focus were poverty reduction, subsidy on oil and electricity and social safety net. Continuous assistance was given through targetted subsidies on fertilizers and Utility Stores Corporation, and 12 million metric tonnes fertilizer was imported. A fertilizer sack worth Rs.3000 was given to the small farmers for only Rs.1500, he said. Rs.50 billion were allocated for Benazir Income Support Programme (BISP), out of which Rs.25 billion were spent and millions of needy and deserving families benefitted from it, he added. Gilani said under the seventh National Finance Commission (NFC) award, provinces are getting additional resources. Before this award, the provinces were provided Rs. 670 billion, while during the year 2010-11, Rs. 1000 billion were given and this year Rs. 1200 billion are estimated to be provided to the provinces. So in these two years, Rs. 900 billion were given as additional resources to the provinces, he added. He said the government achieved the historic landmark of 18th Amendment in the Constitution and subjects were transferred to the provinces. Despite that, the federal government is providing about Rs. 54 billion of additional development funds to the provinces, he added. The Prime Minister said the programmes of Lady Health Workers, TB Control, Polio Eradication, Population Welfare and Higher Education were prominent efforts of the government.
The Prime Minister said besides additional resources to the provinces, the federal government is providing Rs. 70 billion to Azad Kashmir, Gilgit Baltistan and FATA.
“Your government has given various programmes and packages for the progress and prosperity of Balochistan, especially under the NFC Award. Balochistan province is guaranteed revenue transfer of Rs. 93 billion.” He said during the first six months, exports have reached Rs. 12.1 billion, which is 9.1 percent more than the same period of 2010. This target was achieved due to diversification of exports and new markets. Last year record Rs. 25 billion exports were made, which is more than 28 percent against the last year figures, he said. He said imports in the first six months of 2010-11 were more than 17 percent as compared to corresponding period of the last year. The reason for the increase was hike in oil prices in the international market, which on average rose from 85 dollar per barrel to 112 dollar per barrel and till now the government has not transferred the full effects of increase in oil prices to the people, he added. However, the Prime Minister, said the increase in imports is an important signal in rising economic activities in the country and it will have a positive effect on the GDP growth during the year. The Prime Minister said the flow of remittances from the overseas Pakistanis was on an average one billion dollar per month since July 2011, which is unprecedented. The remittances have shown an increase of 19.5 percent from July to December 2011 against the same period of previous year, he said. The Prime Minister said rupee remained stable in the last three years and this stable exchange rate was in the range of Rs. 85 to Rs. 91. “On the other hand, our key competitors rapidly reduced the value of their currency,” he added.Gilani said the government initially achieved this performance due to its efforts and did not rely on foreign players. “Now there is no IMF programme and since 2010 we have not taken any loan from IMF,” he said adding payment for expenses of Coalition Support Fund (CSF) was not paid in 2011, while the assistance of World Bank and Asian Development Bank was normal.Prime Minister Gilani said with a stable balance of payments position, the government will repay $ 1.4 billion of IMF loan during the current financial year from the budgetary resources, which shows the country’s economic strength. He said with focus on the vital energy sector, the government has been following and implementing structural reforms in power sector and timely payment of Tariff Differential Subsidy was also being ensured. The Prime Minister said that the government was also going to resolve the issue of circular debt soon and in this respect settlement of around Rs. 163 billion will be done in the next few days.
Gilani said as getting more energy was vital for enhanced economic activities, the government has added a total of 3334 MW of electricity in the national grid since 2008, as against his promise of adding 2000 MW. He said that as the government was working on increasing power supply, around 5000 MW of hydel electricity would be added in the national grid during the next three to four years. The Prime Minister, while rejecting the impression as if the government was running after the world with a begging bowl, assured the nation that the government was following and implementing the economic policies in the perspective of Pakistan’s economic conditions, which were unprecedented. “Rest assured that the economy is in safe hands,” Gilani said and added, the economic reforms agenda proposed by the government was not a short-term action but it covered total institutional framework. He said with the prudent economic policies and measures in place and good economic indicators, the country’s economic prospects were stable and the government was putting the economy on right track. The Prime Minister expressed his belief that the country’s future was bright and prosperous, adding, “we are showing to the world that reforms and economic discipline is our own requirement and not due to others’ dictation.” He said: “We are capable of organizing ourselves and are on the right path to secure our nation’s present and future.” About gas shortages, the Prime Minister said there are plans to add 2.5 billion cubic feet of gas in the system during the next two to three years.
He said OGDCL would add around 526 mmcf of gas within the next two years, out of which 100 mmcf has already been provided. One thousand mmcf would be imported from Iran by 2013, he said and added the import would help meet the demand of gas in the country. He said some businessmen have shown interest to make investment in LNG sector and they would submit their proposals soon. The Prime Minister said political stability was a must for economic stability and “we should all contribute towards political stability”. He also urged media to help promote economic stability by giving hope and shunning the tendency of talking unnecessarily about revolution.
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