ISLAMABAD: The sub group of Economic Advisory Council (EAC) on industry and trade, headed by Abdur Razzak Dawood, has recommended diversification of export base; moving away from prime focus on textile and rice and for promoting non-agriculture based export industry including engineering, IT, chemicals and food processing.
The recommendations were forwarded to the council in a meeting of the EAC chaired by Federal Finance Minister Ishaq Dar.
The sub-group highlighted that GSP plus status is not just for textile; it includes all products. It recommended making Pakistan a hub of exports in relation to engineering and chemical sectors. The sub-group appreciated the strategy of phasing out the SRO regime while maintaining a level-playing field.
Meanwhile, the sub group of on resource mobilisation and expenditure management, headed by Arshad A. Zuberi, has recommended the government to review its expenditures in the light of its struggle to curtail current spending, which is above the budgetary threshold even after slowing down development spending.
The panel of economists gave a detailed presentation on resource generation and transparency in allocation and management of expenditures.
The sub group asked the government to set up a commission to review and stop the misuse and wastage of taxpayers’ money. The recommendations were made amid growing concerns of mismanagement in public sector expenditures.
In addition to this, the increase in salaries of government employees has more than doubled in past half a decade. Due to this increase, the share of salary component in total administrative expenditure of the federal government has increased to 88% from about 60%.
It was decided that the sub-group will present short and medium-term measures which could be incorporated in the next budget and in a period of three years, respectively.
The EAC sub group also recommended the government to review the National Finance Commission (NFC) Award and reverse the fiscal balance in the next NFC award, which is currently in favour of provinces.
The panel has also asked the government to improve the performance of the Public Debt Management Office, while appreciating recent steps taken to increase the maturity period of the country’s total debt. Currently, over 60% of total debt has up to one-year maturity, exposing the government to risks attached with its refinancing.
During the meeting, sub-group on energy, sub-group on food security and agriculture, and sub-group on social sector also presented their briefings and recommendations to the council.
