KARACHI, June 14: The Social Development and Policy Centre (SPDC) has questioned the credibility of the government claim of 5.1 per cent growth rate during 2002-03, raised question on official assertion of rise in per capita income in double digit and has maintained that poverty is on rise in Pakistan.

Dr Kaiser Bengali, Chief Executive of the SPDC, estimates in 2002-03 the actual economic growth rate is at 4.6 per cent and not 5.1 per cent, per capita income grows by 9.7 per cent and not by 12.3 per cent as shown in the official documents and that budget documents conceal quite a bit of necessary information which is a “matter of concern”.

Defence receipts reports Rs56 billion in the year 2003 of which Rs49 billion is shown as “miscellaneous,” he pointed out while contending that “lack of accounting for a such a large amount is a matter of concern”.

A renowned private sector economic research institution, the SPDC organized on Saturday a press briefing on “State of the Economy: Behind the Aggregates,” at its office where Dr Kaiser Bengali asserted that in any case economic growth during 2002-03 is below 5 per cent.

He quoted from the Economic Survey of 2002-03 where revised growth estimates of the outgoing year have been brought down in five sectors and increase has been shown in three sectors. “Downward revisions result in higher growth rate in the following year,” he argued while drawing attention of the newsmen towards the downward revision made in five sectors in the year 2001-02 to show higher growth in 2002-03.

“Substantial revisions from provisional figures raise questions about the credibility of the data”, a written statement circulated among the newsmen pointed out. It adds “And if base year data is held to be unreliable, then questions arise about the authenticity of the current year data and claimed growth rate based on it”.

He doubts that whatever growth in the overall economy and in export have been achieved is sustainable. His point was that Pakistan’s manufacturing base is too narrow and much of the 7.8 per cent growth in industry has come mainly from textiles, automobiles and sugar.

Similarly, the export growth is driven entirely by the textiles and unforeseeable factor can impair the exports.

Dr Bengali questioned the treatment of data for estimation of per capita income which the government claimed to have increased over year in 2002-03 by 12.3 per cent in nominal terms. He attributed this rise to remittance of over $4 billion during 2002-03 now coming through official channels instead of hundi. The SBP’s purchase of dollars declined from a peak of $2.2 billion in 2001 to $1.4 billion in 2002 and to zero currently.

He estimated that GNP growth rate in 2003 stands reduced to 12.1 per cent from 14.1 per cent shown in the economic survey and actual growth in per capita income comes to 9.7 per cent instead of 12.1 per cent claimed by the government.

Dr Bengali asserted that whatever growth was achieved in the 2002-03 it was driven by rise in remittances from overseas Pakistanis who under compulsion of circumstances were now forced to sent money through official channels instead of hundi.

“Just look at the composition of transfers,” he asked the newsmen. “Trade remains in negative and so is the services sector. The only growth is in remittances which has contributed in the overall growth”.

He also analyzed the sources of remittances while pointing out that Pakistanis in Middle East were workers and they sent money to their relatives here were relatively low income group people. But Pakistanis in USA and Europe are relatively affluent. Their remittances are for the relatively affluent people.

The 2002-03 remittances pattern show that inflow ratio from USA has increased immensely and that from Middle East has come down. It shows that real beneficiaries of remittances are relatively affluent persons and not the poor people.

Quoting from budget allocations, he said that actual resources being given to KESC and Wapda were much more than Rs52 billion which had been declared.