ISLAMABAD:Federal Minister for Finance and Revenue Miftah Ismail on Saturday said worsening government administration had caused huge damage to the national economy and drifted it to the verge of collapse that compelled the coalition government to present a tough budget.
Addressing the post-budget press conference here, he said if that maladministration were not addressed timely, it would cause further devastation and that was why the incumbent government had to present such a budget to address those issues.
The minister was flanked by Minister for Information and Broadcasting Marriyum Aurangzeb, Minister of State for Finance and Revenue Aisha Ghaus Pasha and Finance Ministry officials.
Miftah said there was a need to correct the country administratively, otherwise, its economy would not be run. “We have to go to other countries for loans, packages and deposits. Pakistan is a proud country, a country of proud people, a nuclear power country, and we will have to fix our economy,” he said. “We should not incur such expenditures that we cannot afford.”
The minister said the budget was presented at a difficult time when the country was passing through very hard times.
“At least for the last 30 years…. I have never seen such difficult times where on one side Pakistan is faced with internationally challenging environment and on the other, the government administration has worsened,” the minister remarked. Unfortunately, nothing was done by the previous regime to correct the economy, he added.
Citing huge losses in the power and gas sectors, the minister said during the past year, around Rs 3,400 billion losses were recorded in the two sectors owing to subsidies and defaults.
The minister said subsidies of more than Rs 1,100 billion were given in the power sector whereas the circular debt reached Rs 500 billion, taking the total losses of the sector to Rs 1,600 billion.
The country had no capacity to bear those huge losses, which “if not addressed, would damage the economy, he added.
Likewise, the minister said, Rs 400 billion subsidy was given in the gas sector coupled with Rs 1400 billion circular debt whereas the Sui Northern Gas Pipelines Limited (SNGPL) faced the loss of Rs 200 billion. Gas valuing $2.4 billion was lost annually at the network of the SNGPL, which had never been accounted for.
However, he assured that the government would provide gas to the industry on rates that were competitive in the regional market.
The minister said the previous government had caused huge damages to the economy, however, Prime Minister Shehbaz Sharif took difficult decisions and would continue to take more, if required, to put the country back on track.
The government had no other options but to take difficult decisions and the budget reflected that, he reiterated.
Miftah said during the current fiscal year, there was almost Rs 4,598 billion deficit. Four big deficits in the country’s history were witnessed during the Pakistan Tehreek-i-Insaf government.
He said owing to the huge debts taken by the previous regime, the current government set aside Rs 3,950 billion for debt servicing, which was equal to two defence budgets of the country.
The minister enumerated that the total revenue target had been set at Rs 7,004 billion and if non-revenue resources were added it would take the total revenue to Rs 9,000. Out of it, an amount of Rs 4,000 billion would be the share of provinces, hence the net collection with the federal government would be around Rs 5,000 billion.
He said if Rs 4,000 billion were spent on debt servicing, then the amount remaining with the federal government would be mere Rs 1,000 billion to manage its all affairs. If other liabilities were also counted, then the country would actually start the new fiscal year with minus Rs 600 billion budget.
He said it was unfortunate that despite having huge resources, the country was facing such difficult times. Once it was ahead of India and Bangladesh, but due to mismanagement “we came to this bad situation”.
