Karachi (Jan-24-2025) : The Chairman of National Business Group Pakistan, the President of the Pakistan Businessmen and Intellectuals Forum, the President of All Karachi Industrial Alliance, the Chairman of the FPCCI Advisory Board, and the President and former provincial minister, Mian Zahid Hussain, said on Friday that despite the increase in the prices of electricity, gas and petrol and the massive increase in taxes, loans are being taken.
The borrowing shows that the increase in government expenditure is much higher than necessary, he said.
Mian Zahid Hussain said that if government expenditures are not controlled, the country’s debt servicing will also continue to increase, which will require increased taxes. Excessive taxes will damage the economy and increase poverty.
The business leader said that billions of rupees have been spent on reforms in the FBR for decades, but the desired results have not been achieved.
The pace of implementing the elimination of subsidies and tax incentives, as demanded by the IMF, is slow.
In the erstwhile FATA and PATA, industrial production was several hundred per cent more than the local requirement, which was smuggled into the tariff area, causing a loss of billions of rupees to the country’s economy.
He observed that due to smuggling from FATA and PATA, many tax-paying industrial units have closed, leaving many people unemployed.
Mian Zahid Hussain said Pakistan has been facing severe difficulties for the last few years. The past rulers destroyed the economy to increase the growth rate artificially.
Inflation reached a high of 38 percent in mid-2023, destroying the purchasing power of the common man and making it difficult for many to get food.
He said that in March 2024, Prime Minister Mian Shahbaz Sharif’s government started implementing economic reforms under the IMF program, which decreased inflation to 4.1 percent by December.
Still, the poor man has not yet received the expected relief. Mian Zahid Hussain said that after emerging from bankruptcy under the leadership of Prime Minister Shahbaz Sharif, Pakistan’s economy is moving towards stability, and international organizations are hopeful about Pakistan.
However, he underlined many challenges that need to be addressed.
Mian Zahid Hussain further said that the country currently has to pay an average of $25 billion annually to repay external debts. It is difficult to arrange such a sum of money to repay new and old loans received from the IMF, other financial institutions, and friendly countries.
Therefore, the government has to make efforts to roll over the loans because despite having all the resources and government machinery in the country, neither some goals are being met nor has the FBR achieved encouraging results in increasing the tax net.
In this situation, the government is trying to make the basis of the economy sustainable and increase its size from $ 375 billion per year to $ 1,000 billion per year so that the path to foreign investment is paved. The balance of payments is stabilized, which is welcome, but he said there is a need to significantly reduce bank markups and electricity and gas prices.
