ISLAMABAD, Feb 24: Adviser to Prime Minister on Finance Shaukat Tarin said on Tuesday that the Rs1.36 trillion revenue collection target for the current financial year appeared to be “unrealistic” because of Rs20 billion monthly shortfall in tax collection.
Talking to reporters after attending a meeting of National Assembly’s Standing Committee on Finance, Mr Tarin said that in order to meet the budget deficit target and minimise the impact of the shortfall in revenue collection, the government would not withdraw for the time being the Petroleum Development Levy (PDL) – a form of tax on consumption of petroleum products.
Because of the PDL, domestic oil prices remain high despite a steep fall in crude oil price in the international market.
The adviser said the government earned around Rs12 billion a month from the PDL and the annual income was expected to touch Rs100 billion.
When asked about fears expressed by independent analysts about a steep decline in the GDP this year to 1.2 per cent from 5.8 per cent last year, the adviser said: “The State Bank has predicted 3.4 to 3.5 per cent GDP growth.”
Industrial growth this year would be negative, but the agriculture sector had the potential to take the GDP growth up.
Earlier, Mr Tarin briefed the committee on the government’s ongoing negotiations with the International Monitory Fund (IMF) in Dubai for the release of its second tranche of $775 million.
The IMF may readjust Pakistan’s macroeconomic targets, including the GDP growth rate, inflation, tax collection, foreign direct investment, privatisation proceeds and exports and imports.
Mr Tarin who will be joining the Pakistani delegation holding talks with IMF in Dubai, said the government would not accept any IMF proposal that might have any negative impact on the people.
Earlier, he said that core inflation was one of the leading factors behind the price hike.
The meeting expressed concern over what some members called insufficient measures taken by the government to control inflation and said the common man was not getting any benefit from government’s policies.
Mr Tarin admitted that the government had failed to ensure payment of the officially agreed paddy price of Rs1500 per 40-kg to growers due to rampant corruption in official departments.
Farmers, mainly in Punjab, are being paid less for the super basmati paddy and it is feared that wheat growers may also not be able to get the officially announced price of Rs950 per 40kg for similar reasons.
“But, we will not allow this to happen to wheat growers. We are taking measures to ensure that wheat growers get the officially fixed price,” Mr Tarin observed while responding to a question.
The committee directed the Ministry of Finance to take stringent measures to control rise in prices of various commodities.
The committee also asked the government to provide more subsidies to farmers instead of concentrating on imports, in order to ensure self-sufficiency in food items.
The committee also noted with concern that there was no mechanism to control local and inter-city transport fares despite a 33 per cent decline in diesel and petrol prices.
Mr Tarin said that prices of essential commodities had increased due to speculation, hoarding, artificial shortage and other unfair practices which were normal in Pakistan during pre-budget days.
He said that wheat production this year was expected to be around 25 million tons. However, he expressed dissatisfaction over the performance of PASSCO and Trading Corporation of Pakistan (TCP) and said that these organisations needed to be revamped.