It is obvious that Pakistan’s economy is suffering due to many reasons, and I have mentioned many times before that it can be revived with the increase in its growth rate. The question is: how would it increase and where do we start from.
Pakistan’s entire expenditure sums up to Rs. 3200 billion while a total amount of Rs. 2200 billion is accumulated. Rs. 1500 billion (of the Rs. 2200 billion) is compiled from tax revenues and approximately Rs. 800 billion are gathered from non-tax revenues. Pakistanis boast about the country’s sovereignty-and believe it or not Pakistan’s sovereignty is very dear to me-but it’s hard to do than to say. Pakistan solicits the world for the remaining Rs. 1000 billion that it is not able to generate on its own.
None of the political parties have ever claimed to remove RGST tax or halt its implementation. The tax itself is not a big deal because many countries over the world have levied it. But it should not be a source of the country’s 40-45 percent of tax revenue. RGST tax does not distinct between the rich and poor. In fact, it only pinches the latter. No one has ever planned how to tax the rich, the remittances, or the services sector. Neither does anyone seem to be interested in generating resources from within the country.
The improvement in Pakistan’s economy, witnessed in 2009 and 2010, was all due to the external flows; not from within the country. The country can produce a tremendous amount of tax revenue from its agricultural and real estate sector-and I have written the details in one of my previous article, “The felicitous, ‘Sovereign Pakistan“.
Now, as for the growth rate of the country, I can say that it won’t rise to 8 percent with the country’s own resources. It requires investment and an export oriented economy. This is the direction we have to move on. The country’s essential obligation is to eliminate poverty and unemployment.
For the growth rate of the country to increase the government must discontinue deducting the amount from the Public Sector Development Program (PSDP). The PSDP that has been reduced to meet the fiscal deficit all these years has been cutback from the development sector. The non-development sector’s expenditure is rapidly increasing and it remains untouched. Just look at its figures in the last four years.
For now, the basic measures that can be taken to recover the economy are:
. The credit of the country should be made available instead of eliminating it.
. Electricity and gas should be provided to the private sector.
. The government’s lavish expenditure must be abated.
The provinces also play a major role in the country’s economy. After the NFC awards and the 18th amendment the provinces have to straighten up their act about their contribution in the country’s tax revenue and GDP. They contribute only half percent of it. All four provinces should control their expenditures and highlight their responsibilities.
I have been a part of the parliament for the past twenty years and have been a member of the cabinet for the past 8 years, and I have never seen anyone with an intention to change the country’s situation. Intention is foremost important. The main questions I ask are: Does the country’s political setup have the intention of bringing about a reform? Does it have the vision and the plan? Does it know what it has to do? And, does it have the capacity to do it?
The biggest problem of this country is that, its political setup does not acquire the capacity to handle its internal and external affairs. Currently, Pakistan’s internal and external affairs are apparent, and I rest my case here.
I believe there can be a major change, an immediate turn around within two three years, if the government has the intention of bringing about a change with a vision, that can perceive capacity and support it instead of forgetting it. It should genuinely support the capacity.
In my humble opinion, an immediate reform can be brought by having some technocrats in the national assembly, in the political system, through proportional representation that can fix the inadequate situation of the country.
This nation’s main crisis is its leadership otherwise there is nothing erroneous with it. Pakistanis are the most resilient people I have ever seen. We have to get rid of problems that are not ours. We must leave the past and move on. We have to improve our situation.