World Economy

Pakistan Likely to Miss GDP Growth Target

Pakistan Likely to Miss GDP Growth TargetPakistan Likely to Miss GDP Growth Target

The government of Pakistan is unlikely to meet the target of 5.1 percent for GDP growth in the current financial year, which may settle to 4.2 percent due to the underperformance of manufacturing sector though revenue target might achieve after revising it repeatedly, said Dr. Ishrat Hussain, dean of Institute of Business Administration (IBA).

He was addressing a workshop “Budget Discussion Forum” organized by the Karachi Press Club in collaboration with Coca-Cola on Saturday, AAP reported.

He said the revenue target could be achieved if policies are designed and enforced effectively throughout the country which is not an arduous task but the will of policymakers and proper mechanism is needed.

The tax collection authority could not only collect a target of Rs 2,500 billion ($24.5 billion) but it could surpass the benchmark of Rs 4,000 billion which will not only reduce fiscal deficit and debt-servicing but it will also enhance the capital expenditures on public sector projects.

If local bodies are restored to function efficiently, people will happily pay taxes to the government because the system delivers well to the public interest which was evident at times when district governments were performing visibly in Karachi before 2007, he said.

 More Funds Needed

In the budget, the government should allocate funds for federal, public and local governments in order to provide trickle down effects to the common man, he said.

The budget should be based on spending on social sectors and development of public sector projects pertaining to infrastructure, which will attract private sector to invest in the country to generate employments, revenues and improved living standard.

He said taxes on the agriculture sector are decreasing considerably if compared with its relation to GDP but if a salary class could pay taxes on the threshold of Rs 0.4 million annual income, why not the sector is taxed equally.

Property taxes in Karachi could generate a handsome income for the development of whole city but unfortunately the taxes are not collected properly and deducted at the old rate set in 2001, Dr. Hussain said.