Dawn – Finance Minister briefs PM on country’s economic situation

Islamabad, 2 July 2012. Finance Minister Dr Abdul Hafeez Sheikh called on Prime Minister Raja Pervez Ashraf at Prime Minister House on Sunday and briefed him on the country’s economic situation.

The Finance Minister said that the fiscal year 2011-12 ended with a growth of 3.7 per cent, showing an improvement over last three years.

Similarly, the minister said better performance was visible in the decline in inflation rate from 13 per cent last year to 11 per cent in the year just concluded.

The benefit of decline in international fuel prices, the minister said, had been passed on to the consumers and during the last 45 days, the prices of fuel, diesel and kerosene had been brought down three times.

He said that the financial year had also ended with foreign exchange reserves of over 15 billion dollars, in spite of paying back to the IMF 1.2 billion dollars during the year as per the schedule.

The minister said that exports remained strong in spite of global economic crisis and were likely to maintain upward momentum in the year 2012-13 as well.

The Finance Minister highly appreciated the role of expatriate Pakistanis and said the remittances were at a historic high level of over 13 billion dollars.

He said with satisfaction that the year 2011-12 had also ended with record level of tax revenues, which were expected to surpass the Rs 1910 billion – an increase of Rs 450 billion, showing a growth rate of 23 per cent, the highest level of growth in single year in Pakistan’s history.

The Finance Minister further said that the financial year 2011-12 also ended with successful completion of Federal PSDP where projects benefiting the economy worth Rs 300 billion were undertaken showing 100 per cent utilization and completion of more than 200 projects.

He also briefed the Prime Minister on the revival programme of Pakistan Steel Mills for which allocations had been made by Ministry of Finance to ensure the success of its new management and to gradually increase the output from present 20% utilization to 80% utilization of the Steel Mills capacity so it becomes profitable.

The Finance Minister said that the recent improvement in the production of electricity sector from 10,000MW to about 14,000 MW had given a relief to the public but greater efforts would be required from the management of the electricity sector and relevant ministries to overcome this challenge on a fasttrack basis.

The Prime Minister expressed his satisfaction on the economic stability and appreciated the successful efforts of the team under the leadership of the Finance Minister and directed that prudent economic policies should be continued.

The Prime Minister also directed that the incoming year’s PSDP allocations to projects based on regional balance and completion of ongoing projects showed that the maximum benefits could be made available to the public, especially the people belonging to Balochistan, Fata and other less developed regions of the country.

The Finance Minister also gave an update on the working of the Cabinet Committee on Energy.

http://dawn.com/2012/07/01/finance-minister-briefs-pm-on-countrys-economic-situation/

The Tribune – Ministerspeak: Looking ahead; ‘We are on fiscal correction path’

Parminder Singh Dhindsa , Finance Minister, Punjab

Begining today, The Tribune starts a series of interviews with key Punjab Ministers on their priorities

State’s youngest Finance Minister, Parminder Singh Dhindsa, wears a crown of thorns. With the state’s debt burden soaring to Rs 77,585 crore and its own revenue generation not keeping pace with expenditure, the minister faces an uphill task in getting the state’s economy back on track. In an interview with Ruchika M. Khanna, the minister discusses Punjab’s economy and the challenges ahead.

- What is your overall perspective on the state of Punjab’s economy?

Punjab’s economy is not in a shambles as has been projected for some time now. Agreed that the state’s debt has soared to a whopping Rs 77,585 crore. But at a recent meeting with top representatives of the Union Finance Ministry, officials accepted that Punjab is not a debt-stressed state. We are on target with the fiscal correction path laid out by the 13th Finance Commission. The debt to Gross State Domestic Product (GSDP) ratio has fallen to 29.91 per cent against a target of 41.80 per cent fixed by the commission. Similarly, the fiscal deficit is 3.39 per cent of the GSDP against a target of 3.5 per cent while the revenue deficit is 1.30 per cent of the GSDP against a target of 1.80 per cent fixed by the commission. Punjab should be able to achieve revenue balance by 2014-15.

- What tops your agenda with regard to improving the state’s fiscal health?

The main priority is to generate more resources and to cut down on wasteful expenditure so that more funds are available for development activities and various welfare schemes. Though the state’s own tax revenue has increased from Rs 16,828 crore in 2010-11 to RS 20,408 crore in 2011-12, showing a growth of 21.27 per cent, we need a much higher growth in revenue in order to sustain the growth momentum that our government launched during its previous term.

- How do you propose to improve the state of finances, considering the SAD-BJP government’s reliance on sops to keep voters in good humour?

Being a welfare state, we have to continue with our social welfare schemes and also expand their scope so that more and more people are benefited. But for this, we need additional resources. The priority is to reduce expenditure. The Secretary, Expenditure, has already been asked to look into how this can be done. In order to increase resources, we will have to plug all loopholes in tax collection, besides looking at ways and means to increase revenue.

- How will you increase revenue generation? Will you impose new taxes?

The additional revenue will come mainly through curtailing administrative expenditure. We could emulate the Haryana model where administrative expenditure is being brought down by 10 per cent annually in the past two years. This could mean a freeze on buying new vehicles, cutting down on office expenditure and rationalising office staff. We could also look at increasing service charges marginally. People are not averse to paying more, provided they get efficient services. We also look to the Opposition for a constructive approach in helping us take Punjab forward.

- Have you been able to identify the challenges in implementing various programmes?

We have already calculated the additional cost of implementing various welfare measures announced by the Chief Minister in the election manifesto, which is around Rs 10,000 crore. We have had meetings with the Chief Minister and the Deputy Chief Minister, apprising them of additional revenue requirements. How to go about it — whether by a marginal increase in taxes or by plugging loopholes in tax collection and cutting down expenditure — is something that has to be decided at the Cabinet level.

- Does Punjab have enough funds to continue with the existing welfare schemes, leave aside implementing new promises made in the poll manifesto?

The biggest challenge before me is to do the balancing act — fulfil the promises made in the election manifesto and carrying on with the existing welfare schemes. Though the state’s own tax revenues are increasing, the state’s share from devolution of Central taxes has gone down from 2.450 per cent in 1970-75 to 1.389 per cent in 2010-15. But we are firm in our commitment to the people of Punjab and will definitely honour all our promises.

- Is there a schedule worked out to implement the promises?

Yes. The party leadership is aiming at quick deliverance, though in the first year, we will implement these schemes with some limitation as we have to work out ways to increase resources. But all promises will be fulfilled on a priority basis.

http://www.tribuneindia.com/2012/20120430/punjab.htm#1