THIS refers to the editorial ‘Expat contributions’ (May 1) and the report ‘Next budget to focus on GDP, inflation, uplift projects: PM’ (May 3). Remittances are not a sustainable mode of supporting the economy and over-dependence on this element is dangerous.

Roshan Digital Accounts by overseas Pakistanis and the recently floated bonds, which were oversubscribed by 100 per cent, are not prudent avenues for raising dollar funds as these carry high interest rates besides representing borrowings.

Perhaps, Shaukat Tarin has been brought in to give a new direction to the economy in the wake of the enormous challenges vis-à-vis the incoming budget. Needless to say, tough and innovative measures are unavoidable to put the economy on the right footing beyond political sensibilities.

The demonetisation of Rs5,000 note should be the very first step towards documenting the economy and broadening the tax net.

Imports must be compressed significantly to reduce the yawning trade deficit, while additional incentives can be considered to push up the exports that are dismally low.

Bridging the budget deficit through external borrowings is a perilous strategy. A plan must be put in place to bring down the debt burden as interest payments on debt are mounting to the extent that they now constitute the biggest expenditure in the budget.

Cash payments under Ehsaas programme, free food, free shelter, subsidy to Utility Stores, Ramazan package, etc., are mostly unproductive schemes. Besides, the benefits do not reach the targeted community owing to a variety of reasons.

Pruning the current expenditure and increasing the Public-Sector Devlopment Programmes (PSDPs) will accelerate growth, employment and the revenue base.

During Shaukat Tarin’s stint as finance minister in the PPP regime, the growth rate was mere one per cent. It will be interesting to see what different strategy he unveils this time.

Arif Majeed
Karachi

Published in Dawn, May 12th, 2021

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