Federal minister Hammad Azhar, in his address at the Applied Economics Research Centre (AERC) Annual International Conference in Islamabad, shared some facts which highlighted the resurging economy during the past one year of the PTI government. The minister enlightened the audience about the major reasons behind Pakistan’s stunted economic growth. He opined that major reasons why Pakistan had been facing higher revenue to expenditure gap were: low tax to GDP ratio; narrow tax base and undocumented economy; and also that, the present political regime had been working on these three most pressing challenges. The kind of tax collection done presently by the incumbent government is qualitatively different than the ones done in past. Previously, the major chunk of tax collection was exacted through withholding taxes which are a form of indirect taxation. However, aim of the present government is to ensure maximum collection through direct taxation.
Pakistan has emerged as one of the biggest improvers in World Bank’s latest Ease of Doing Business Index 2020, jumping up 28 places on the index and clinching the 108th position, as compared to 136th spot last year.
External and fiscal deficits are narrowing, inflation is expected to decline and growth, although slow, remains positive. However, sustaining sound economic policies and advancing structural reforms remain key priorities to enhance resilience and pave the way for stronger and sustainable growth. Budgetary collections are growing despite the ongoing compression in imports, inflationary pressures are expected to recede soon, measures to strengthen the social safety net are being implemented and development spending is being prioritized.
Governments in past have been importing coal for cheap energy production. Nonetheless, the transportation cost of that coal was so high that it soared the cost of electricity generation almost two times. The incumbent government aims to add 7000 to 8000 MW of renewable energy in national grid system by 2023. Reduction of circular debt addition to zero is also under progress. Current account deficit has also gone down by approximately 73% compared to last year. Exports, during the past one year, have gone up from $45 billion to $65 billion. Hammad Azhar concluded the conference by putting emphasis on the need for more data based research in the universities of Pakistan.
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