Finance Minister Shaukat Tarin has said that stabilisation is no more affordable for Pakistan’s economy that should now shift gear towards higher growth and the International Monetary Fund (IMF) would be convinced to relax conditions particularly those related to power tariff hike.
Testifying before the National Assembly’s Standing Committee on Finance, Mr Tarin said the higher power tariff was leading to corruption and affecting economic growth. The conditions agreed to under the IMF programme were very harsh, he was quoted as saying in a report.
He claimed that the government would take alternative measures to reduce circular debt instead of tariff increases. Similarly, he said, tax net would be expanded instead of increase in taxes to achieve revenue targets. However, he admitted that the state-owned entities that the government was unable to run in the public sector would be privatised.
The finance minister said the IMF was being convinced to have a sympathetic view towards Pakistan after it had been hit by the third wave of coronavirus pandemic. Unless the country moved to higher economic growth, nothing would improve and if we continue with stabilisation that has been in place for over two years, neither revenue collection would go up, nor job opportunities would be available to people or productive capacity of the economy could improve, he explained.
Shaukat Tarin tells NA panel it was a mistake to keep policy rate at 13.25pc
He informed the committee that the country had been in the stabilisation mode since 2019, but it was no more sustainable and if the government continued with the same policy, there would be no economic growth for next two years. In the upcoming budget, he said, the public-sector development programme would be increased so that all the provinces would get equal growth opportunities.
He said a lot of complications were emerging in the absence of economic growth and one of them was the continued increase in capacity payments in the power sector. Even 4pc to 5pc growth next year would not be insufficient, he said.