Punjab’s debt little compared to GDP, says finance minister

Insists economy of province needs to grow at faster pace

LAHORE:

Down playing the Rs421 billion debt accumulated over the years in Punjab, which amounts to nearly two-thirds of the development budget for next year, Punjab Finance Minister Dr Ayesha Ghaus Pasha said the figure merely represents 3% of the Rs16-trillion gross domestic product of the province.

Debt servicing ate up a tiny 3% of the budget spending, she said while addressing the Lahore Economic Journalists Association on Thursday.

Pasha emphasised that Punjab’s economy should grow at a pace of 7 to 8% to absorb the fast growing workforce. With over one million workers entering the labour market in the province every year, she said, robust and consistent growth would be needed to fully accommodate the new entrants.

Despite growing at a pace faster than the rest of the country, Punjab has still to achieve the required growth rate.



Regarding revenues, Pasha pointed out that although most of the finances of provinces came from the centre, these were not sufficient for all the development projects.

She said provincial revenue generation was very low and largely came from excise, property tax, stamp duty and services.

Highlighting the improved tax collection in Punjab, she said revenue flow for July to December 2015 grew 31% compared to last year. This, she added, would help reduce Punjab’s dependence on Islamabad.

Discussing the allegations that funds were being reallocated to the ‘fast’ completing projects, she conceded that such had been the case, but it involved only ‘minor’ amounts. For more substantial reallocation, the provincial legislature had to be approached.

Talking about the Rs23 billion food subsidy that offered a blanket relief to the rich and the poor, she said the government had devised a plan to target only the ‘real’ needy.

She proudly claimed that the inflation rate had been brought down to 4.5% after the reduction in prices of petroleum products.

Pasha said the United States did not support coal-based power plants. In this regard, modern technology is being introduced to make environment-friendly energy a reality.

She said 50% of Punjab’s population was below the age of 25. To equip and enable the youth to better tackle the problems they would face, better education, better health facilities and vocational training, sensitive to the market needs, were being offered.

Published in The Express Tribune, March 18^th, 2016.

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