Despite some success, govt fails to win over businesses

Businessman says budgets do not create jobs, introduce technology

LAHORE: The Pakistan Muslim League-Nawaz (PML-N) government, which is said to be pro-business, has failed to win hearts of the business community, especially in Punjab, despite claiming some achievements in fiscal matters and turnaround of the economy.

The four budgets presented by the current government in its tenure so far, which were expected to give a boost to the economy and provide relief for the general public, have not satisfied the real stakeholders ie business circles.



“The budgets were not visionary, in fact they were replicas with minor additions, which failed to boost the economy, add sizeable number of jobs and introduce technology in the manufacturing sector,” said Syed Nabeel Hashmi, a Lahore-based businessman while talking to The Express Tribune.

The general perception in Lahore, which is believed to be the hub of ruling party, is that the budgets have been prepared in line with International Monetary Fund’s (IMF) dictations.

Financial gurus of the government have failed to please local businessmen, though they have achieved some targets like easing inflation and policy rates but what they missed is the trickle-down effect of such policies.



Hashmi said the real issue for the country was energy supply. “Look at the 60% fall in global crude prices in the past one and a half year and the actual relief the government has passed on in electricity tariff,” he pointed out.



“The government takes credit of increasing the foreign exchange reserves to $24 billion, but how much money in these reserves has actually been generated by Pakistan,” he asked.

The Federal Board of Revenue (FBR) is the target of nearly all businessmen, only few give some credit to the tax collection body, but most of them criticise it as the body has clearly missed the targets set by the government for improving revenue flows.

“The revenue collection by the FBR has increased from Rs1,946 billion in fiscal year 2012-13 to Rs2,588 billion in 2014-15; the target for fiscal year 2015-16 was over Rs3 trillion and in three quarters the FBR recorded an increase of 19.7%, but still issues remain to be addressed,” said Lahore Chamber of Commerce and Industry President Sheikh Muhammad Arshad.

There are some segments that need to be tapped. “The agriculture sector generates less than 0.1% of the total tax revenues, but it accounts for 25% of the country’s GDP and employs nearly 45% of the total workforce,” Arshad said, adding the number of corporate income tax filers was still 25,551, out of more than 60,000 companies registered with the tax department.



The active corporate income tax filers are merely 0.8% of the commercial and industrial electricity consumers.

“Budgets are meant to set direction of a country for the next year, however, every year the government promises relief and no further taxes, but in reality it introduces mini-budgets and imposes indirect taxes and different SROs,” said All Pakistan Business Forum President Ibrahim Qureshi.

Such mini-budgets, he said, had a negative impact on the import and export policies and such ad hoc measures discouraged investors as they thought that the country had no long-term plan and vision to tackle the challenges.

“The government claims that it has managed to lower down interest rates but on the other hand banks are still reluctant to give loans to private businesses as the state itself is the biggest borrower,” he added.

The business community believes the PML-N’s business-friendly perception is now being replaced with a monopolist image that is controlling all things rather than facilitating the stakeholders. It has no clear direction and it is making day-to-day policies to portray a positive image.

Published in The Express Tribune, July 9^th, 2016.

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