KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zakaria Usman has said that the stagnancy of traditional fiscal policies in Pakistan has failed to revive the economy and we do not have fiscal space for badly needed development projects.
He has further said that the traditional approaches for financing the deficit and resource mobilization through heavy indirect taxes are damaging the economy of Pakistan. In this scenario, FPCCI feels its responsibility to help the policy makers by presenting the shadow budget for 2014-15. FPCCI’s recommended fiscal policy and ‘shadow budget’ are based on these policy parameters and proposals.
Zakaria said that most important point of FPCCI’s doctrine of the shadow budget is the desire to achieve the accelerated growth. Historically, the rate of growth of Pakistan’s economy was higher than the countries in the region and is almost twice of the rate of growth in Indian economy, he added.
President FPCCI further stated that Pakistan has been considered as fast growing economy. The scenario was changed in early 1990’s, and now we have been facing lower rate of growth. In the end first decade of twenty-first century we lost our highest position in the region in terms of per capita income. Now, even we are facing the problem of economic survival.
While explaining the strategy of FPCCI Shadow Budget, he said that our strategy is divided into two parts: first is about survival and the second discusses the revival mechanism. Shadow budget has been prepared on the basis of 7 per cent GDP growth rate which is required for survival. For the revival of economy and fast growth mechanism, FPCCI has prepared a plan–Economic Vision 2025.
He informed that an integrated and detailed mechanism of economic planning and development projects has been explained in Economic Vision 2025 and this plan will be revealed in next month.
He said that the recommended targets of annual budget can be reconciled with the long-term planning presented in FPCCI’s Vision 2025 program. FPCCI strategy is based on the mechanism that fiscal policy and budgetary targets are applied for the survival of economy, while medium and long term planning should be adopted for the revival of historical growth, he added.
He stated that FPCCI represented 92 per cent of economy in terms of GDP and we cannot keep ourself isolated from economic policies. “We from the platform of FPCCI have strongly recommended that 7 per cent rate of growth is required for the survival of Pakistan’s economy. The trickle down effects of growth are not possible at a growth less than 7 per cent, which means that if economy grows less than 7 per cent, the growing poverty will not reduce.
Government of Pakistan has estimated that economy will grow at the rate of 5.5 per cent during 2014-15 while estimated rate of inflation is 8 per cent. FPCCI agreed with the rate of inflation if our GST proposal is accepted by the government. However, our estimates indicate that because of accelerated growth in the economy the rate of GDP growth will be around 7 per cent.
