Govt to surpass 2.4pc growth target, says finance adviser

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  • Hafeez Shaikh says govt expects to generate Rs800bn in non-tax revenues
  • Says overall CAD reduced by 73pc due to considerable increase in exports

ISLAMABAD: Prime Minister’s Adviser on Finance Dr Hafeez Sheikh on Wednesday claimed the government will put an end to the circular debt by December 2020, saying that the debt has already been reduced to Rs10 billion from Rs38bn per month.

Addressing a press conference along with the economic team, the PM’s adviser said the measures taken by the government against power theft and losses in transmission lines paid off, as it saved at least Rs120bn by overcoming these losses.

According to a report in May this year, the Ministry of Power had told the prime minister that during 2017-18, the circular debt had increased by Rs450 billion which would be brought down to Rs293bn during the current year and Rs96bn by 2019-20. However, the issue of circular debt would be completely overcome by the end of next year.

Speaking about the progress at the economic front, he said the government was confident to surpass the growth target of 2.4 per cent after gaining stability on the external front during the past year.

“There has been considerable growth in exports, while imports have declined from $5 billion to $4.1bn, reducing overall current account deficit of the country by 73pc,” said Sheikh.

On the other hand, the overall revenue has also increased from Rs509bn during the first two months of the last year to Rs580bn during the current year, showing a 25pc growth, he said, adding that non-import revenues surged by 40pc.

Shaikh said that the government would clear all the verified sales tax refund claims filed till 2015, which would benefit around 10,000 people.

He said that Income tax refunds of up to Rs 100,000 since 2015 would also be cleared to benefit the middle class.

He said that the government had introduced a system with no human intervention to ensure immediate refunds to exporters, adding that the system, which was being labelled as ‘faster’, has already been implemented and operational since August 23.

It would clear refund claims of previous month up to 16th of the next months, he added.

He said that the government also expects around Rs800bn non-tax revenues, out of which Rs200bn would come from renewal of licencing of cellular companies, Rs300bn from LNG Terminal privatisation and Rs300bn from the interest of State Bank of Pakistan.

The advisor said that the private sector credit also increased from Rs70bn last year to Rs120bn, providing additional Rs50bn.

On the issue of Gas Infrastructure Development Cess (GIDC), he said that the government had decided to refer the matter to Supreme Court for guidance and cleared that the government decision would be taken on the basis of three basic principles: in accordance with the law, for the public interest, and through a transparent process.

Talking about the stability phase, the adviser said that after assuming the power, the government focused on the external sector and had an agreement with the International Monetary Fund which had been “widely appreciated”. It also engaged with the World Bank and Asian Development Bank, he added.

He said that private sector and vulnerable segments of the society were given special attention in the budget.

In addition, the government also took austerity measures and reduced government expenditures by Rs50bn, besides “freezing expenditures of military and pay of high officials”.

To a question, the adviser said in order to control prices in the country, the federal government was increasing coordination with the provincial governments.

With respect to floating of bonds in the international market, he said in a few weeks, the people will get concrete news.

To another query regarding recovery of $800 million stuck up since 2006 during privatization of PTCL, Sheikh said that the government was initiating renewed efforts in this regard.

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