Sir: This is with reference to the news reported in the media on April 30, 2014 titled, Economic revival top priority, says prime minister. In this connection, I suggest the following action plan for the economic revival of the country.
Unfortunately, Pakistan's economy is a story of an economy of loans.
The above statement can be easily vouched from the latest data released by the State Bank of Pakistan (SBP) showing an alarming increase in the domestic debt. In the first nine months of the current fiscal year, debt increased by 20 percent year-on-year basis as compared to 17 percent rise in the same period last year.
The total central government debt, including external debt, stood at Rs 15.3 trillion at the end of March, up by 15 percent from last year. The external debt of the central government — which excludes IMF loans for balance of payment support — stood at Rs 4.4 trillion at the end of March, registering little change over last year.
Under the Fiscal Responsibility and Debt Limitation Act 2005, the government is required to keep the debt-to-GDP ratio at 60 percent. However, the SBP data until December 2013 shows the debt-to-GDP ratio at 63.3 percent.
During the tenure of the last PPP-led government, Prime Minister (PM) Mian Nawaz Sharif kept criticising the government for burdening the economy with debt. Now his own government, breaking all the previous records, is embarked on the same path of acquiring domestic and foreign loans.
I believe that unless the government takes certain steps it cannot revive the economy. These steps are:
1. Fifty percent reduction in the pay and perks of all government employees.
2. Absolute ban on foreign trips of government officials.
3. Complete ban on foreign medical treatment on government expenditure, right from the top to the bottom, except for those who are the victims of terrorism.
4. Ending subsidy on food items available to the Senators, MNAs and MPAs at the parliament cafeteria, where meals are served almost free.
5. Complete ban (in a real sense) on official entertainment at all levels barring the state functions where only a single dish may be served.
6. National Accountability Bureau should be directed to take immediate steps (absolutely ruthlessly) to recover (from within and outside Pakistan) all the looted national money, on a fast track basis.
7. Immediate reduction in both direct and indirect taxes to a maximum 10 percent.
8. During the economic emergency period, there should be a ban on increasing the prices and rates of petrol and oil products, electricity, gas and essential items like cement, sugar, pesticides and fertilisers, etc.
9. Immediate orders should be issued for documenting the economy, including the informal sector.
Syed Nayyar Uddin Ahmad