ISLAMABAD: The focus of next year’s budget would be on increasing economic growth, the government announced on Monday.

After presiding over an inconclusive meeting of the Economic Advisory Council (EAC), Finance Minister Ishaq Dar said that despite lower than targeted growth rate during the current fiscal year, economic indicators have started showing stability and recovery in economy and future focus would be on increasing growth.

Informed sources told Dawn that in view of repeated postponements and paucity of time, the meeting of the EAC was held in an unstructured manner and lasted for a little over one hour.

The finance minister promised to include valuable suggestions made by the EAC members in the budget making and have another consultative session before the announcement of the budget.

The sources said the finance minister told the participants that the government had adopted a three-pronged strategy, starting with protecting the country from international default by entering into an International Monetary Fund’s bailout programme.

He said while the default was successfully avoided in the first year of the PML-N government, the next target of the government was to take advantage of the IMF support and achieve macroeconomic stability.

Mr Dar said the objective also had generally been achieved by cutting down budget deficit and current account deficit and bring down inflation.

He said the third stage of the government strategy was to move towards growth trajectory by increasing spending on growth-oriented priority areas by maximising allocations for public sector development programme.

It was pointed out by some participants that throwing money alone would not be enough to trigger economic growth but it was important to focus on areas like infrastructure, energy, highways, water, ports and communications that generate economic activities and jobs.

Simultaneously, spending on education, health and skill development should also be increased, along with quality improvement to augment human development that would ultimately contribute to economic growth on a sustainable basis.

It was also recommended by members of the council that the government should also pay attention to regional development through increased connectivity to ensure inclusive growth and developing far flung regions to the mainstream.

The finance minister agreed to prepare the budget strategy on the basis of recommendations made by the EAC and have another round of consultations before presentation of the budget on June 5.

While sharing recent developments on economic front, the minister told EAC members that the fiscal space available to the government had been contained due to the higher expenditures on security related operations, floods and settlement of displaced persons.

The EAC members suggested that private sector participation should be encouraged, especially in infrastructure development and other fiscal measures should be put in place to bolster economic activity and consequently jobs creation.

It was deliberated that tax recovery needs to be further improved while ensuring facilitation for the tax payers.

The EAC also emphasised the need to engage provincial governments to undertake integrated and coherent initiatives to improve service delivery and infrastructure development in key areas of economy.

Members of the EAC include Dr Ishrat Husain, Abid Hasan, Farooq Rahmatullah, Arshad Zuberi, Dr Sania Nishtar, Dr Ashfaque H. Khan, Dr Abid Qaiyum Suleri, Sakib Sherani, Qazi Azmat Isa, Abdul Razak Dawood, governor State Bank of Pakistan and chairman, Federal Board of Revenue and Chairman, Board of Investment.

Published in Dawn, May 19th, 2015

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