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Economic road map to revive economy

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Considering state of dipping into harsh slackening, Prime Minister Imran Khan has instructed his economic team to get ready a roadmap for revival of national economy alongside with IMF conditions to reinvigorating economic activities. The economist have been pleading that economy is leading toward stagnation and is necessary to control rising inflation, unemployment and increasing poverty. In the wake of increasing disparities on the fiscal front, the government is heading towards limited alternatives to run the IMF programme successfully. Former finance minister Dr Hafiz A Pasha stated that the current account deficit curtailed but the rising budget deficit was matter of harsh concern for all.
Advisor to the Prime Minister on Finance Dr Hafeez Sheikh after a meeting chaired by the Prime Minister with his economic team during the weekend claimed in a five-minute video that the government was in the action of getting a road map to accelerate economic activity and provide relief to the general public. The Advisor has constantly demonstrated an unwillingness to commit with media and answer to its enquiries other than to do over prominent points of the agreement he signed on behalf of the government with the International Monetary Fund. The Advisor’s video kept that subsidy on electricity and gas is provided to the business community. To facilitate business community to get loans, the question is given that the problem is the high discount rate; and the general public already burdened with high inflation, continues to suffer wear and tear of their income earned through the government’s continued high reliance on indirect taxes with private sector employees not being given a pay raise commensurate to the rate of inflation due to threat of closures. Advisor to Prime Minister on Finance Abdul Hafeez Sheikh says the government is planning a plan of action for economy to take significant decisions for prosperity of multitude. At a press briefing after the meeting of economic team with Prime Minister Imran Khan in Islamabad, he claimed under this roadmap the team will advise the Prime Minister about all major decisions on weekly basis. Abdul Hafeez Sheikh stated that the object of the meeting was to evaluate the performance of economy and design a plan to the advantage of the ordinary people through developmental projects and existing budgetary allocations. He said the Prime Minister instructed to complete the big projects rapidly for the benefit of people at basic level.
Details of the road map include five major policy decisions. About 38.6 billion dollars would be required from outside sources to meet the 39-month-long IMF programme objectives comprising support from multifaceted and reciprocals as well as go over agreed with friendly countries. Simply in other words, the scope of reliance on foreign loans is anticipated to accelerate moreover during the programme period. The rush and proportion of raise in the discount rate and rupee depreciation, before IMF requirement have, by raising input costs, acted as hurdles to an industrial turn-around. Large-scale manufacturing sector recorded adverse growth in the year simply ended on 30 June and there has been no proof of an ascending tendency in July. Auto sector has been knocking hard as the import of parts to manufacture/assemble the car has accelerated input costs including taxation measures, have diminished the sale of cars. The hue and cry for used cars has reappeared and, if permitted, the probability of shutdown of auto manufacturing/assembly plants would increase unemployment levels significantly. Moreover taxes on intermediate raw material imports have further discouraged industrial output. Exports to heighten to encounter foreign exchange decline. Exports have not answered to the rupee depreciation substantially as a result of the consent of the market- established exchange rate, a before IMF loan requirement. The July decline in the current account deficit can be due mainly to the Saudi 3 billion dollar oil facility which accounted for around 60 percent of import lessening in July. Budgeted expenditure has not been decreased under any title and on the other hand increases in markup from about 1,987,319 million rupees in the reviewed guesses of last year to approximately 2,891,449 million rupees in the existing year. Pensions, have risen by 23 percent, defence in spite of the sacrifice made by senior authorities not to get a pay raise by almost 11 percent, subsidies by 6.4 percent, grants and transfers by 63 percent. Federal development expenditure has been raised from 500 to 701 billion rupees, a raise of 40 percent, with the large amount to be spent on social infrastructure.