KARACHI: Finance Minister Dr Abdul Hafeez Shaikh said Saturday that the largest burden on the national economy is payment of Rs 1 trillion for the subsidy and losses of state-run power entities in the last four years.
“This is huge money”, he said while speaking at Karachi Press Club (KPC) on national economy. “This means that the government is providing electricity to the consumers at a lower price than its cost,” he added.
The minister said that inefficiency and corporate misgovernance are other reasons for incurring colossal losses.
He underlined the need for enhancing the role of private sector in state-run power sector organisations by encouraging public-private partnership to improve their performance and reduce losses.
He said the government has to improve corporate governance, devise an ideal fuel mix, improve tariff structure and speed up future power projects to resolve energy crisis in the country.
He said the tax collection has improved in the country due to government efforts to tax rich people. This will ensure self reliance. In the previous five months of current fiscal year, the revenue collection was higher by 28 per cent to record Rs 640 billion compared to same period last year. This is more than the target, he noted.
Dr Hafeez said that the current revenue collection target is Rs 1,952 billion which is higher by 25 per cent over last year's Rs 1,558 billion, up by 17 per cent over 2009-10.
He pointed out that the government has paid Rs 50 billion under Benazir Income Support Programme to poor under a cash transfer scheme. This is targeted subsidy programme to ensure that the poorest segment of the society should not be left behind, he added.
He said that the government was trying to focus on the economy for the last five months to ensure economic stability in the country Referring to the flood 2010, the minister said that this catastrophe inflicted a colossal loss of $ 10 billion on the economy and eaten up 2 per cent of the GDP.
The government will cut its own budget as well as of other sectors to ensure national security, he said.
Responding to a question about the possible stoppage of US financial support to Pakistan under present circumstances and the preparation of the government, he said that there was no big change in US policies relating to financial support to Pakistan. Pakistan will continue to get $ 500 million every year from USA, he noted.
The minister said the largest fund providers to Pakistan are IMF, World Bank, Asian Development Bank and Islamic Development Bank and not USA.
Moreover, we are presently focusing on “trade” and not on “aid” and therefore, are exploring new markets in the coming years, he added.
Recalling the political achievements of the present government, he said that an additional Rs 800 billion are being provided to the provinces under NFC award.
“Now the provinces are getting 60 per cent of the total national resources while the federation is getting only 40 per cent from the national kitty. Prior to current NFC Award, federation was getting 54 per cent of the national resources while provinces were getting 46 per cent, he added.
Dr Hafeez underlined the need for the unity among all the institutions in the country to jointly face all the internal and external issues.
He said that in the world scenario where major economies are facing problems and big international organisations were closed down in the recession, Pakistan needs to create an atmosphere where people should have faith in its solidarity, economy and security.
Earlier, KPC president Tahir Hassan Khan and secretary Moosa Kalim introduced the minister and announced to extend life membership to Dr Hafeez Shaikh.
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