ISLAMABAD, June 8: Former finance minister Sartaj Aziz has said that the federal budget 2003-4 will not be able to tackle poverty, unemployment and the widening gap between the rich and the poor.

The Pakistan Muslim League (Nawaz) leader speaking at a press conference on Sunday said that according to official figures, the absolute level of poverty had increased from 26.6 per cent in 1998-99 to 32.1 per cent in 2003. So the actual number of people living in poverty had increased by over 11 million, from 36 million to 47 million during the four years, he added.

Another former finance minister, Ishaq Dar, and former deputy chairman of the Planning Commission, Ahsan Iqbal, were also present on the occasion.

Mr Aziz said that according to official estimates, given on page 119 of the latest Economic Survey, the level of unemployment in the country had gone up in the last three years from 5.9 per cent in 1999 to 7.9 per cent in 2003.

He was of the view that only a sustained rise of at least 6 per cent in the GDP over several years would reduce poverty and that was not currently in sight because of low level of investment in the country. The claims of “economic recovery” and “take-off” made in the budget were based on very fragile foundations, he said.

He said the government policy framework had been anti-farmer throughout the past four years which was directly responsible for the increase in rural poverty. Instead of protecting the farmers from the effect of the subsidies, he said, the government under pressure from the IMF and World Bank had started taxing the agriculture sector by imposing 15 per cent GST on fertilisers and pesticides and raising the prices of electricity and diesel.

Mr Aziz also pointed out a large number of discrepancies in the facts and figures printed in the Economic Survey and the Budget (Annex) and called for a major reform of statistical services in the country.

He called upon the relevant standing committees of the National Assembly and the Senate to dissect the proposed pro-poor budgetary expenditure of Rs180 billion to ensure that at least 50 per cent actually reached the poor.

The Economic Survey and the budget has used different benchmarks year for different indications to present a more favourable picture for the past three years. For example, he said, most tables in section I of the Survey on Growth and Investment being from the year 1990-91, but tables 1.1 to 1.6 were of 1992-93, because in 1991-92 under the Nawaz Sharif government the country had the highest growth rate of 7.7 per cent and that had to be concealed.

Similarly, data on poverty for 1998-99 on page 49 of survey had been inflated from 26.6 to 30.6 per cent and that for 2003 decreased from 32.1 to 31.8 per cent on the basis of a specially managed small survey of only 726 households just to show that level of poverty was going down.

Ahsan Iqbal, while speaking on the occasion, said the budget was for the elite with some crumbs for the poor.

“The budget lacks vision to transform Pakistan’s economy into knowledge economic, the political will to fight poverty, and a strategy to push the economy towards a high growth platform. All the concessions that have been announced will benefit the rich and making the poor, peasants, labour, and lower middle classes more vulnerable to the economic hardships,” he added.

Mr Iqbal said: “The government has given misleading figures in the budget. In the budget documents it claims to have spent Rs131.6 billion on the PSDP last year against the target of Rs134 billion while the finance minister in his budget speech has put the figure at Rs120 billion thus showing a shortfall of over 10 per cent.

“It is interesting to note that during 2002-03 both non- development and defence expenditures have over shot the limits while development budget had been axed.”

He said the defence budget, which was increased from budgeted Rs146 billion to Rs160 billion during previous financial year due to deployment of troops on the account of border tension had been maintained at Rs160 billion during the current budget while troops from the borders had withdrawn and peace initiatives in the region were in full swing.

Senator Ishaq Dar said the budget had violated Article 160 of the Constitution as the process regarding National Finance Commission before announcement of the budget was ignored. “This budget also violated Article 73 of Constitution which did not yet require the laying of money bill for recommendation before Senate until the relevant amendment in Constitution in approved by the Parliament in accordance with procedure laid down in the Constitution in this regard,” Mr Dar said.