April 24, 2007	Tuesday	Rabi-us-Sani 06, 1428

LAHORE, April 23: Prime Minister’s Adviser on Finance Dr Salman Shah on Monday said the government planned to raise the salaries of government employees in the next budget. The ratio of direct taxes vis-à-vis indirect taxes in its tax revenue will also be increased, he added. Responding to the questions by reporters at the 4th Punjab Development Forum (PDF), which began here, he said the revenue collection for the current fiscal year was quite encouraging and the government had successfully achieved its targets.

In his speech to the participants of the forum, the prime minister’s adviser said that the government’s second generation economic reforms would focus on the private sector led economic growth in the country. “We want the private sector to lead the economic growth and the government should act as a facilitator.”

He claimed that investors’ response to Pakistan Investment Bonds (PIBs) had been very encouraging as it had received an offer of Rs45 billion against the target of Rs15 billion. He said the country's economy had been growing at an annual rate of seven per cent in the last several years and would attain the same rate during the year 2006-07.Dr Shah said core inflation (non-food, non fuel) had come down to 5.5 per cent and it would improve with increase in supply, bringing down the overall inflation rate. On food inflation, he said it was out of control of the government.

He was hopeful that it would also come down by the end of next year as the government was making efforts for improvement on the supply side.

He said that Pakistan had received foreign direct investment (FDI) inflows of $5.5 billion during the first 10 months of the current fiscal and its total volume would cross $6 billion by the end of the fiscal.

On Sino-Pak economic relations, he said the Chinese factor would get very important in Pakistan's economic development in the coming years. A special economic zone was being developed near Lahore while efforts were being made to raise the volume of Sino-Pak trade to the level of $20 billion from the existing $5 billion.

“We have signed a Free Trade Agreement (FTA) with Beijing to achieve the target of increased bilateral trade.” He stressed the need for more investment in human resource development in the country and added a better demographic profile could prove a major strength.

“We can transform this comparative advantage into economic strength of the country by putting in more money into human resource development," he said.

He said that the National Trade Corridor Improvement Project (NTCIP) would prove key to the future economic growth of the country. Calling for more public-private sector partnership in the economic sector, he said the involvement of private sector would help double the investment in infrastructure development projects, which currently stood at Rs450 billion.