Shameer Kazi discusses an interesting media discussion
Talk with Rana Mubashir is a well-known host of the Aaj TV show, “Aaj Rana Mubashir ke saath” which is rated to be quite a popular program. In his recent show dealing with the after-effects of the federal budget presented by the coalition government, he invited Asrar Raouf, former senior member of policy at the FBR and noted expert on taxation affairs, Aisha Ghaus Pasha, minister of state for finance and Muzzammil Aslam, a noted economist and former spokesperson to the finance ministry for discussion about various aspects of the budget. To begin with Rana Mubashir regretted that he is not an economist and always refrains from giving valued judgment on economic issues. He expected answers from his guests about the sticky question of estimating the expenditure and then go looking for the means to obtain money for defraying the expenditure. In his introduction he said that speculation is that dollar may climb up further and may go up to Rs.240. He added that prices of petrol and diesel may go up to Rs.300. The price of a unit of electricity may go up to Rs.40 that may further exacerbate the already very high inflation rampant in the country.
Asrar Raouf, former senior member of policy in the FBR, agreed to the contention of Rana Mubashir that the policy of estimating expenditure before generating money for it is devoid of any financial logic. The governmental procedure in this respect is that it estimates its expenditure first and then pushes the FBR to go ahead and collect revenues to defray such expenditure. He mentioned that the cost cutting measures announced by the government are hard to materialise and it is a frivolous exercise. He added that in order to contract the economy, the government raised interest rate but this is the most inadequate method to manage an economy.
He said that the misplaced financial decisions have badly damaged the economy. Every government runs the economy according to its priorities ignoring the national needs of the economy. He pointed out that the previous government tried to take care of the interest of overseas Pakistanis whereas the incumbent government is heavily indebted to the trading class and has provided facilities to them such as levying fixed tax that would only generate 20 to 25 billion in revenues. The government may have earned compliments from the trading class but it has ignored high-earning members of companies who earn something like Rs.300 million but they are taxed only at 2 per cent. Asrar Raouf criticised the lopsided approach of assessing and collecting taxes as it ignores meaty companies and go for retailers who are unable to foot the bill.
He emphasised that the banks charge high rates of spread as on 13.75 per cent of interest rate the bankers put up spread of 4 per cent that becomes a burden on loan-getters. He emphasised that such a spread is unheard of in economic circles and it ultimately suppresses the ability of an entrepreneur for undertaking a project. He added that many former finance ministers came from the banking sector that encouraged prosperity for it and the banks have become very wealthy meaning that the wealth has been wrongly concentrated in some sectors. He also said that the economist trained and oriented by international financial agencies such as IMF follow the policy of jacking up interest rates aimed at benefitting Roshan Digital Account holders but such steps generate much less money and badly harms the local industry that face the prospects of obtaining very dear loans impeding them to generate finances for economic development.
Rana Mubashir asked PTI leader Muzzammil Aslam, known to be an economist who served as spokesman of the finance ministry, that if the economy during their tenure in office was progressing well then why are they blamed for laying booby-traps on the financial road hindering the new government to take required steps for rectifying the current state of economy. He took the traditional line of the PTI and mentioned that their government did well despite difficult economic conditions and criticised the coalition government for being insensitive to the needs of the common man. He acknowledged that inflation was higher during their tenure but that was due to the landmines planted by the PMLN government. He emphasised that the difficulty is caused due to differential of leadership.
Aisha Ghaus Pasha was asked about the anticipated problems that the price increases announced by the government. She took exception to the remarks of Muzzammil Aslam about stopping NFC award funds to the provinces. She said that the artificial policy of lowering the petrol prices by the PTI increased consumption of fuel by 20 per cent. She said that the subsidies granted to fuel was not feasible as it increased the burden on the poor segments of people while providing benefits to the higher income groups. She also pointed out that Pakistan is simply living beyond means and that this tendency is required to be curbed. She said that the coalition government is in tune with the common man who understands the financial difficulties faced by the country. TW