KARACHI: Contrary to past practices, Finance Minister Ishaq Dar has not approached trade and industry leadership for taking their input for the upcoming budget to be unveiled on June 9.
As less than a month is left, business leaders have deplored that the PDM government has not invited them for any consultative sessions to incorporate their proposals in budget 2023-24, fuelling fears that it will be an IMF-dictated document which will further complicate the economic situation.
Site Association of Industry (SAI) president Riazuddin told Dawn that traditionally successive governments used to engage the business community in the budget-making process by holding consultative sessions with apex chambers, businessmen, industrialists, etc.
The Site chief recalled that in previous regimes, Mr Dar used to hold day-long deliberations with the trade and industry bodies by terming it a “grand finale” ahead of the budget announcement. “So far we have not been invited. We do not know whether the budget will be made on IMF dictation or the government is undertaking this exercise independently,” he observed.
Says Dar has not held any meetings with industry leaders
He told Dawn that the businessmen have also not seen any “budget strategy framework” which was previously shared by the governments almost four months ahead to review the outline of the budgetary measures.
Mr Riazuddin said the government has only asked the business community during February in writing to send their pre-budget proposals but no face-to-face discussions with Mr Dar and his team including the Federal Board of Revenue (FBR) chairman have so far been held.
While showing his concerns, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh said the government has not yet started the consultative process with the business community in general and the apex body in particular.
He, however, invited Mr Dar to visit the FPCCI and meet the business leaders to take stock of their proposals vis-à-vis the upcoming federal budget and also listen to their issues, apprehensions and recommendations.
The apex chamber wants to present and discuss its proposals on industrial, trade, shipping and transportation, taxation, SME, agriculture, IT, monetary and fiscal policies with the government. “Budget-making is the opportunity where we can have meaningful course correction based on ground realities, regional and global business environment and national interest,” he remarked.
Mr Irfan expressed his shock that IMF has resorted to arm-twisting as it has raised — for no reason — the external funding requirement from $6 billion to $8bn. “This is unfair and unethical and the international community must take notice,” he added.
He emphasised that the government’s economic and financial team must be crystal clear now that the IMF programme is not going to materialise before the upcoming budget.
He observed that the government was making its budget based on a resumed IMF programme but, given the fluid circumstances, it now has to make major adjustments in the budget within the short period of three weeks.
Mr Irfan maintained that the only solution that can steer Pakistan out of the crisis is indigenous with few basic principles.
One is simplification and broadening of the tax base rather than squeezing the existing taxpayers and harassment of the business and industry and secondly, targeted subsidies to the five export-oriented sectors (i.e. textiles, IT, leather, sport and surgical goods) in electricity and gas tariffs, making it competitive through regionally competitive energy tariff (RCET) mechanism to manage exports earnings due to dearth of dollars.
The government should also encourage remittances by bridging the exchange rate gap between banking channels and open markets and protecting the assets of overseas Pakistanis.
“There is a need to incentivise industrialisation, export substitution and revival of sick units and make all economic policies in consultation with real stakeholders,” he stressed.
All political parties must sign a national economic agenda and plan for the next 15 years to ensure the continuity of economic policies and protect it from political meddling, he remarked.
Published in Dawn, May 14th, 2023