Text of Miftah’s budget speech

ISLAMABAD, Jun 10 (APP): Following is the text of budget speech delivered by Finance Minister, Miftah Ismail in the National Assembly on Friday”


Mr. Speaker:

It is my honour to present before this august House the first Budget of Coalition Government. The coalition had bagged more than 60% votes in the last General Election. The representatives of all federating units are represented in this Government, therefore, the decisions taken for country’s economy enjoy the greater backing of entire nation.

2. The Government is facing the difficult challenge of deteriorated economic conditions due to extremely poor performance during the last quarter to four years. Last Government has been taking revenge from Pakistan and its people continuously for quarter to four years for unknown reasons. Social structure get affected badly because of their short- sightedness. Economic growth had stopped and national unity fell apart. Poor governance had peaked during their era due to which common man was affected badly. Rupee experienced massive devaluation, consequently price of everything skyrocketed. The life of poor and middle class become miserable.

3. A naive team had pushed the country towards disaster during the last quarter to four years. Every year, a different person used to present budget and every year rather during the year economic policies of the government would change due to which confidence of investors and development partners was shaken. Those people were master in refuting what they had said earlier. The people of Pakistan used to see their U- turn time and again but as they were habitual, they continued to vary their stances before international fraternity and international financial institutions. This led to suspension of IMF programme in February, 2022 which was scheduled to complete in the same year. The fundamental reforms which were due to take place in 2019 were not initiated.

4. Fundamental reforms are required to correct the structural imbalances of economy. Such reforms usually face immediate public backlash but the dividend is that the foundations of economy are set on solid foundation.. Last government has been shying away from such reforms. Thus it has been pending all such reforms due to which the economy could not stand on its feet so far, therefore, prosperity remained elusive.

5. The incumbent government is short of time. The government could have easily passed on the buck to next Government to the detriment of country. In anticipation, we have decided to carry out all those reforms which will benefit to the economy and hence the country. The joining of government was conscious decision in the backdrop of a deteriorating economy. We had two options; one was to leave the country in the situation in which it was and announce new elections but that would have ruined the economy and putting the country back on track would have been difficult. Therefore, we chose the second option and started taking difficult decisions. Indeed, this is a difficult way but this is the only path to sustainable progress. We have done it before, we can do it and we will do it. In-sha-Allah.

6. We always preferred national interest against our political interest.

This time our first and foremost priority is the economic stability. A fundamental problem of our economy has been that the rate of economic growth remained 3 – 4 percent which is inconsistent with the growth rate of our population. In contrast to it, when the growth rate exceeded 5 – 6 percent, it led to uncontrollable current account deficit. The reason behind this phenomena is that to advance the economy we have been giving concession to affluent classes. This used to result in increase in imports while experts remained stagnant. This happened last year, rather the same happened every time. Therefore, we will have to think, we will have to find a solution as a nation. A way forward for our economy will be to give incentives to our middle and poor classes which will result in increasing domestic production, in turn leading to improvement of agriculture.

7. We will have to improve the economic lot of the poor and assist them so that their income is increased. When the income of the poor increases, they buy goods and services which are produced domestically. Expenditures on such consumer goods do not result in increasing imports but the development process gets initiated in a country. By doing so, we can achieve sustainable and inclusive growth.

8. We will have to lay the foundation for economic growth. A sound foundation upon which
a splendid edifice of sustainable growth can be constructed and which stays there with all its glory. We will have to focus on increasing exports as our growth formula. We will have to increase our Agricultural, IT and Industrial exports. We will have to increase the produce of our agriculture and will have to increase the competitiveness of our exports so that it can compete with the products of other countries in international market. We will have to enhance the ease of doing business to attract local and foreign investors. After importing machinery and raw material we will have to work for value addition for their thereafter. In this way our volume of export will exceed that of our exports.
Economic Situation and Planning Mr. Speaker!

9. Every one knows that we are facing the challenge of putting a wrecked economy back on track. There has been economic instability during the quarter to four years. Historically high prices, foreign exchange problems, reckless borrowing on high rates, load shedding coupled with last government’s failures to mitigate these problems have made the lives of people very difficult and miserable.
Mr. Speaker!

10. Owing to the bad governance during last quarter to four years, Pakistan stood third amongst sizeable countries in high prices. Seventy five million people are forced to live a poor life. The number increased by 20 million during the quarter to four years. During that period six million people lost their jobs. Previous government borrowed Rs 20,000 billion during its tenure of quarter to four years which is equal to 80% of the total debt taken since the times of Liaqat Ali, Khawaja Nazim-u-Din, Ayub Khan, Zulfiqar Ali Bhutto, Mohtarma Benazir Bhutto, Main Muhammad Nawaz Sharif till Shahid Khaqan Abbasi and, Mr. Speaker including you during the last 71 years. It was because they spent phenomenally more than their income and presented the four highest ever deficit laden budgets in the history of Pakistan. Their average budget deficit remained almost 8.6%. During this period our debt increased astronomically by almost Rs 5,000 billion annually and during current financial year it is expected to reach Rs 54,000 billion. Likewise the circular debt of power which we left at Rs 1,062 billion in May 2018 has reached Rs 2500 billion. Circular debt in gas sector for the first time in the history of country has risen to Rs 1,400 billion now.

11. During the tenure of my leader Main Muhammad Nawaz Sharif, rise in prices had been very modest. The price hike remained close to 5 percent. The lowest level of inflation i.e. 3.9% was recorded during that period. Owing to the poor governance of last quarter to four years, there has been a persistent price hike in Pakistan. The former Prime Minister used to say that he had not come into power to monitor the prices of onions and tomatoes, rather he had come into power to make the country great. I do not know how one can make the country great by grinding the common man into price hike.

12. I fail to understand as to why the prices of sugar and flour had gone up with the beginning of Imran Khan’s Government. In 2013, sugar was being sold at the rate of Rs 55 per k.g and in 2018 when we left the rate was Rs 53 per k.g. After 2018 sugar price sky rocketed, and exceeded Rs 140 per k.g. Then Prime Minister Shehbaz Sharif came into power and brought it back to the level of Rs 70 per k.g. Likewise when we left in 2018 flour price was Rs 35 per k.g which in Naya Pakistan reached Rs 80 per k.g. But again, Shehbaz Sharif came into power who managed to supply flour at Rs 40 per k.g. at Utility Stores and at a number of other specified stores. At the end of our tenure Pakistan was exporting sugar and flour but at the end of theirs we are importing both these items