ISLAMABAD: Federal Minister for Finance and Revenue Shaukat Tarin presiding over a follow-up meeting of the Economic Advisory Council at the Finance Division on Saturday.—APP
ISLAMABAD: Federal Minister for Finance and Revenue Shaukat Tarin presiding over a follow-up meeting of the Economic Advisory Council at the Finance Division on Saturday.—APP

ISLAMABAD: The Eco­n­o­mic Advisory Council’s (EAC) subgroup on agriculture has proposed a block allocation of Rs41.25 billion in budget for 2021-22 for int­erventions under the Agric­ulture Transformation Plan to reduce input cost of farm produce and revive cotton production in order to minimise reliance on imports.

The council’s sub-committee on information technology has also submitted a string of proposals to promote IT exports and e-commerce in the country.

The EAC’s various subcommittees proposed policy measures during a meeting that was presided over by Finance Minister Shaukat Tarin on Saturday.

The subcommittee headed by Food Security Minister Fakhr Imam and comprising Industries Minister Khusro Bakhtiar, Jamshed Cheema, Ghufran Memon, Ameer Aziz, Mansuril Arfeen, Salman Shah, Dr Abid Suleri and others submitted its report that suggested proposals for the agriculture sector.

The report proposed that Rs4bn be allocated under the budget for interventions in research and promotion of organic agriculture, promotion of soybean for edible oil, floriculture for export purposes and horticulture cluster development.

It also proposed that Rs5bn be allocated for construction of silos to store grains, Rs12bn for fertiliser subsidy, Rs9bn for Trading Corporation of Pakistan to procure 20pc cotton (one-time allocation), and another Rs8bn for warehousing intervention.

The areas to be targeted are cotton, olive, soybean and palm, and genetic improvement in livestock and fisheries.

The measures proposed for bridging the yield gap include seed sector reforms, introduction of digital subsidy mechanism, improving water efficiency, revamping of extension services, post-harvest storage and restructuring of research institutions.

Mr Bakhtiar emphasised the need to introduce the Agricultural Transformation Plan, which has been prepared by the present government after extensive discussion with the relevant stakeholders and after making detailed analysis of available data.

Finance Minister Tarin assured the meeting that the proposed plan would be considered carefully and vital recommendations would be made part of the upcoming budget.

The sub-committee on IT proposed that tax be either done away with or their rates reduced for three years in the case of startups, which will help in expanding the domestic corporate market and reduce local unemployment.

Currently small companies, perhaps with limited staff and resources, avoid entering the formal sector because of minimum and high advance tax and low margins.

The sub-committee also proposed that startup advance tax exemption be reintroduced and extended for five years.

The meeting was told that the IT sector is one of the fastest-growing sectors in the country and at $3.5bn it contributes about 1 per cent to its GDP. Its contribution has doubled in the past four years and experts expect it to grow by a further 100pc in the next two years, to $7bn.

IT exports touched their highest level at $1.067bn in the fiscal year 2017-18, compared to $939 million registered in the previous year. Pakistan’s software exports are currently worth $700m annually, according to the State Bank of Pakistan (SBP).

However, the country’s freelancers earn another $0.5bn in exports, an amount not captured by the central bank as these are not documented or regularised. The freelance market in Pakistan is ranked fourth in the world and is growing at a whopping rate of 47pc per annum, thus requiring support and regularisation.

The sub-committee on IT proposed several policy measures to attract investment to the sector, train human resources and create export surpluses. The IT subgroup discussed their proposals to explore the potential of the sector and create an enabling environment for generating exportable surplus.

The finance minister tasked the group with formulating proposals that could facilitate local trade, enhance financial inclusion, pave the way for forming partnerships with International IT experts and develop skills of the untrained youth. He also affirmed his support for the sector by making appropriate policy changes.

The subgroup on China-Pakistan Economic Corridor (CPEC) led by CPEC Authority’s chairman retired Gen Asim Saleem Baja told the meeting that its projects were being completed according to the commitments made.

Mr Bajwa discussed the possibility of investments in the various special economic zones in collaboration with the regional development partners in a structured manner through short, medium and long-term strategies.

The subcommittee on social security led by Sania Nishtar briefed the meeting on the proposed plan of interventions by Ehsaas Programme next year and submitted proposals for budgetary allocations.

Mr Tarin appreciated the proposals and praised Ms Nishtar on evolving a comprehensive programme for social protection and poverty alleviation in the country.

Mr Tarin told the meeting said that the objective of EAC was to make concrete short-, medium- and long-term strategies for growth and for transformation of all sectors of the economy. Different subgroups had been constituted to give concrete proposals in consultation with the stakeholders.

Prominent among those who attended the meeting were federal Minister for Economic Affairs Division Omar Ayub Khan, Adviser to PM on Commerce Abdul Razak Dawood, Adviser to the PM on Institutional Reforms and Austerity Dr Ishrat Hussain and Governor of State Bank of Pakistan Dr Reza Baqir.

Published in Dawn, June 6th, 2021

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