ISLAMABAD, June 8: The government would reduce duties on raw materials and basic inputs in the forthcoming budget to promote industrial activity particularly focusing on the export-oriented industry
and small industries in the Small and Medium Enterprises (SMEs) sector.
Announcing this at a pre-budget seminar, finance minister Shaukat Aziz on Tuesday said the revenue target for next fiscal year is expected to be set at Rs580 billion, to be achieved through expansion of the tax base but without introducing any new tax.
He said the basic philosophy of the next budget is to create an environment that leads to a hassle-free atmosphere as far as the duty and tax regime is concerned, and SME sector is facilitated that is currently faced with a lot of problems for being small in size.
The minister said a growth rate of 6.4 per cent has been achieved in the current fiscal year but there were still more challenges to be tackled in coming times. The biggest challenge, he pointed out, remains job creation and raising the public sector expenditures in the infrastructure sector is one way to address this challenge, which would stir a lot of economic activity thus also creating more job opportunities.
Further, he said, investment in infrastructure was also a must to continue moving towards higher growth trajectory and added there was great potential in Pakistan's economy and the government planned to channelise the resources in an appropriate manner to achieve even higher growth in the coming years.
He said that the basic focus is also on the human capital and the government intends to invest in it as well to produce highly technical and more skilled force. He said the achievements in the economic sector were made possible because of consistency in policies and it was must for future as well.
Poverty, he said, was also a major challenge and since it is all about creating opportunities for the poor, the government is focused on making policies that in turn would create opportunities for the poor.
He said it was the time to move towards quantum leaps in growth instead of past practice of moving on incremental basis to achieve higher growth. He conceded that image building, security and implementation of policies were also big challenges, and added the government was fully conscious to these challenges.
The government was optimistic about economy and if all goes well "we will be achieving 6.6 percent or more growth in fiscal year 2004-05 and in next two to three years GDP growth would be touching 7 per cent," he said.
Dr Akram Sheikh, deputy chairman, Planning Commission said the Budget 2004-05 would be a part of long term strategy, in which the government would focus on improving technology, producing skilled labour and achieving higher standards of quality.
The government plans to bring out a policy that will help create more vocational institutions to produce skilled labour thus fetching more on exports, he said. Dr Shiekh said Pakistan needs to invest more in education and particularly on the engineering and high technology education to match the growing world needs.
Pakistan is presently marginalized in the technological achievements in global competitiveness, which is in a way also hindering flow of investment in Pakistan.
Dr Ashfaque Hassan Khan, economic adviser to the government gave a presentation on the economic achievements and said that Pakistan has travelled a long distance and now it is on a high growth trajectory with stable macro-economic environment, and is in a position to move towards second generation reforms for the benefit of the common people of the country.
