ISLAMABAD: Describing economy back on track, Finance Minister Abdul Hafeez Sheikh Thursday vowed to bring big-fish under tax net to increase tax GDP ratio besides curtailing yawning fiscal deficit. Answering questions at the launching of Economy Survey 2010-2011, Minister Sheikh said “after passing through crises over the last couple of years, the economy is back on track passing through stabilization phase.”
Skipping the questioner seeking figure of the amount of tax he pays, he said, “most of my tax is deducted at source as is the case of salaried people. I do own certain amount of land and pays the tax whatever it owes,” he added. To another question, he said, Pakistan had received $745 million out of U.S. assistance committed for the current financial year. He did not consider necessary to give out the break-up.
Although the entire team of the economy managers was there to flank the Finance Minister but they failed to give out any figure on the incidence of poverty. They also could not deny the fact that the defense and security expense was on the rise due to the ongoing war against terrorism. Since they had no latest figure on the poverty, they were unable to rule out the impressions suggesting the incidence of poverty being on the rise with inflation staying in double digit for a number of years. However, Finance Secretary Waqar Masood said the unemployment figure was at 5.8 per cent.
After identifying around 750,000 affluent people allegedly evading tax, the government anticipates around Rs 100 billion more revenue from these evaders. In this drive the government has moving the following up with the apparent and tangible wealth of the people through independent assessment.
About additional tax measures, the Finance Minister said that the government was going do away with the zero rated regime wherein it mostly have to pay from the national exchequer in terms of refunds. According to the Economic Survey, the document on the 10-months performance of the economy, it grew by 2.4 per cent during the financial year to end June 30, 2011, where as the fiscal deficit remained 5.7 percent.
>> According to economic survey, service sector of the country showed good performance with 4.1 percent growth rate against the target of 4.7 percent, for which the target for next year has been fixed 4.5 percent.
>> Public administration and defence posted a stellar growth of 13.2 percent as compared to 2.5 percent last year.
>> Whereas the growth in the agriculture sector is estimated at 1.2 percent on the back of 3.7 percent growth in the livestock sector.
>> Output in the manufacturing sector, has witnessed expansion of 3 percent in 2010-11 on the back of strong performance by small and medium manufacturing sector,
>> whereas large scale manufacturing grew 0.98 percent from July 2010 to February 2011. During the first nine months of the current fiscal year’s production on large scale manufacturing increased by 1.71 percent.
The survey also informed that the per capita income has risen by 0.7 percent in 2010-11 as against 2.9 percent last year. Whereas per capita income in dollar term rose from $ 1073 last year to $ 1254 in 2010-11 thereby showing tremendous increase of 16.9 percent.
>> The total investment has declined from22.5 percent of GDP in 2006-07 to 13.4 percent of GDP in 2010-11.
>> The national savings also decreased to 13.8 percent of GDP in 2010-11 as against 15.4 percent last year,
>> whereas the domestic saving also declined from 16.3 percent to 9.5 percent during last five years.
Tax collection by FBR was targeted at Rs 1.66 trillion but it was downward revised to Rs 1.58 trillion. Out of which FBR has collected 1.316 trillion in the 11 months of financial year 2010-11.
>> The survey revealed that that the exports of the country remained at $ 24 billion, which is expected to rise to $ 28 billon by the end of this month.
>> The foreign reserves crossed $ 17 billion.
>> The worker’s remittance totaled $ 9.1 billion as against $ 7.3 billion last year.
The overall exports recorded a positive growth of 27.8 percent during July 2010 to April 2011 of the current fiscal year against an increase of 8.0 percent in the same period last year. In absolute terms exports have increased to $ 20,154.2 million from $ 15773.2 million.
Whereas the imports during first ten months of the current fiscal year has increased by 14.7 percent, reaching to $ 32.3 billion. The overall import bill is higher by $4.1 billion reflecting the impact of higher international crude oil and commodity prices. The higher import bill is contributed by
> food group ($ 1528 billion),
> petroleum group ($ 678.3 billion)
> consumers’ durable ($ 247 billion),
> raw material group ($1039 billion),
> telecom ($245 billion) and
> other item ($ 951 billion).
The merchandise trade deficit improved by $ 240 million and declined from $ 12.3 billion in July April 2009-10 to $ 12.1 billion in July April 2010-11. The current account balance improved significantly during last two years. Current account recorded a broad –based surplus of $ 748 million. In July April 2010-11.
The exchange rate remained more or less stable as rupee depreciated by 2.2 percent, however Real Effective Exchange Rate appreciated by 0.8 percent in the period.
During first nine months Pakistan’s total external debts increased from $ 55.9 billion to $ 59.5 billion . Last year the consumer price index was increased by 14 percent , whereas the rate of inflation was below 10 percent , but this year it is recorded 13.2 percent.
The devastating flood caused a loss of $ 10 billion . The destruction by flood and increase in petroleum price in international market have put the adverse affect on the economy .