ISLAMABAD: Amid criticism from members of the government and the opposition of the National Assembly about the price increase and other monetary and fiscal policies, the government ruled out any mini-budget in the near future on Wednesday, saying the improvement in revenue collection would be achieved through technology and administrative measures.
This was the crucial point of a meeting of the Standing Committee on Finance and Income of the National Assembly chaired by Asad Umar, who wished that the Prime Minister's advisor on finance and governor of the State Bank of Pakistan (SBP) attend such sessions in interest of the government.
The committee was informed that the change in the base year from 2007-08 to 2015-16 reduced the inflation measured by the Consumer Price Index from 11.6 percent in August to 10.5 percent. Asad Umar wondered what inflation rate the SBP could consider for the policy rate. He said that the CPI showed an upward trend in recent months and that the government should take steps to find reasons and address them.
He said the Pakistan Competition Commission had reported an apparent collusion in the rates of sugar and wheat flour, while the prices of onions, chicken and sugar rose by 66{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}, 65{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} and 7{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}, respectively.
The national price control committee entered into session months ago instead of meeting every month, the NA panel said.
Hina Rabbani Khar of the Popular Party of Pakistan said that inflation was now affecting most people and regretted that fiscal and monetary policies were contracting wages and income and increasing inflation.
Ramesh Kumar of Pakistan Tehreek-i-Insaf said he had alerted the government six months ago about the impending increase in wheat prices. He said that factories in Sindh were full of wheat and that large quantities were exported. He criticized the government for banning the importation of medicines from India in the wake of recent tensions and said it was unrealistic and should be changed.
PTI member Faizulla, former chairman of the committee, said that the Ramazan and Sasta bazaars established under the current government had become a source of corruption instead of benefiting the common man and the subsidies the government was granting were in some pockets "People did not get relief through these bazaars during our government that we and our party had promised," he said.
Dr. Aysha Ghous Pasha of the Pakistan-Nawaz Muslim League said the government's steps to address the problems of the poor were not effective.
Naveed Qamar of the PPP said that the monetary policy of the SBP was resulting in the closure of factories but did not affect prices because the increase in interest rates was leading to an industrial and economic contraction.
The Secretary of Finance, Naveed Kamran Baloch, admitted that he and his team could not organize an adequate briefing on prices and promised to propose at the next meeting a strategy to counter inflation. He regretted that the national price control committee headed by the Prime Minister's advisor on finance had held its meeting a few months ago instead of every month.
Asad Umar said the economic team should be ready to explain the macro policy steps through fiscal and monetary policy on inflation and agreed with members that there is no bigger problem than inflation today. "The advisor and governor [SBP] should take time [for the finance committee] since it will be useful for them and for the government, "he observed.
He also questioned the increase in the fiscal deficit and excessive spending last year even though the budget was announced on June 10 and asked how Rs800 billion could exceed the revised estimates in the last 20 days. “Someone has cheated the system somewhere. It is a great article. Someone should be held accountable, "he said, adding that the increase in the fiscal deficit was something else, but that budget estimates could go wrong in such a short period.
He said that the basic idea behind the discount for the industry when he was minister of finance was to reduce fertilizer prices following the increase in gas prices, but he was not aware of the latest ordinance. He said the government believed that the law passed by the PML-N in 2015 on the Cess of Gas Infrastructure Development (GIDC) would remain firm in judicial scrutiny, although the previous PPP attempt in 2012 could not survive.
Ramesh Kumar demanded that the issue of the GIDC amendment ordinance be referred to the National Responsibility Office.
Posted on Dawn, September 5, 2019
Source: https://www.dawn.com/news/1503616/govt-rules-out-any-mini-budget-in-near-future
