The Minister for Finance, Shaukat Tarin, has said that Pakistan will not exit the International Monetary Fund (IMF) program and that the government will convince it to soften its policy.
He revealed this at his first press conference after taking charge as the Minister for Finance on Wednesday.
The minister said that Pakistan will seek leniency from the financial institution on matters related to the hike in the power tariff against the backdrop of the ongoing pandemic, and that Pakistan is already in talks with the IMF and the World Bank (WB).
He said that the incumbent government is pursuing a policy of economic growth and will offer incentives to several industries in line with that policy.
“We will incentivize the industrial sector, exports, agriculture, textile, housing and construction, IT, energy, and the SME sector,” he said, adding that this will also create job opportunities.
Talking about the way forward, Minister Tarin said that twelve working groups have been constituted in the Economic Advisory Council (EAC) to formulate short-term, medium-term, and long-term policies for different sectors and that the council will focus on price stability and reduction, and on controlling inflation.
He admitted that the prices of all the commodities have increased unrealistically, and said that the government will try to limit the role of middlemen, for which a strategy is being prepared.
The minister said there is no concept of social welfare protection in Pakistan but the government has already launched the first-ever protection program through the Ehsaas program. He added that Ehsaas will be expanded to include employment, healthcare facilities, and skills development.
He commended the Federal Board of Revenue’s (FBR) efforts for the enhancement of the revenue collection, and said that more programs will be announced in the upcoming budget to achieve the revenue goals. He explained that these new programs will focus on preventing the harassment of taxpayers and on encouraging people to pay taxes.
Minister Tarin said there was a growth of 57 percent in the revenue collection in April this year as compared to the corresponding period last year. He said that it is the government’s aim to expand the tax base.
He also spoke about the energy sector reforms and said that more reforms will be introduced, adding that spending on the agriculture sector will also be increased to strengthen this vital sector of the economy.
“We also want to bring in Foreign Direct Investment (FDI) in the export-oriented industries in order to bolster our exports,” he said.
He said there is great potential for growth in the IT sector, and that IT exports are expected to be $2 billion this year, which can be enhanced to $8 billion in the next two to three years.
The minister also shared the plans for reforms in the banking sector which will expand its reach 33 percent. He revealed that a program will be introduced to increase the loans for the small and medium enterprises, and that the Kamyab Jawan and Kamyab Kisan programs will also be strengthened further. He remarked that only 8,500 youth have benefitted from the Kamyab Jawan Program, which is very low, and stated, “We have set our target to 2 million”.
Minister Tarin said that the Pakistan Bureau of Statistics (PBS) will have to change its approach to pricing. “Pricing data based on only two cities, Lahore and Karachi, is not acceptable and it should be compiled by taking price data from other cities as well,” he said adding that “There should be statistical data collection here based on the model of Canada and Germany”.