The PML-N on Thursday maintained that the country had become 25% poorer because of the “flawed” economic policies of the ruling PTI and its ability to service the debt had further weakened.
At a pre-budget seminar addressed by all those who were at the helm of economic affairs from 2013 to 2018, the PML-N also opposed levying of new taxes, increase in electricity prices and recommended lowering the power tariffs for farmers.
“Pakistan’s ability to service its debt has further weakened as its debt has increased to an all-time high of nearly nine times more than the tax collection,” said Miftah Ismail, PML-N’s last finance minister.
He added that during the PML-N’s time, the debt-to-tax ratio was at the lowest level of 6.5 times.
“This government has increased our debt burden more in its first three years than any government in its full term in history.”
The former finance minister claimed that in less than three years, the PTI government had added 54% to the national debt in comparison with what was added to it in 71 years.
“The PTI is adding Rs4.747 trillion debt per year and building nothing. Had the PML-N’s policies continued, the size of the national economy would have been $368 billion and the per capita income $1,775 at the end of the fiscal year 2020-21.”
Miftah said when the PML-N left in 2018, the size of the Pakistani economy was $313 billion.
“Pakistan is poorer today by 25% due to the economic policies of the PTI,” he added.
The former finance minister further claimed that after three years, Imran Khan had reduced the size of economy by $296 billion or by 5.5% even as the country's population had increased by 7.5%.
“There is a direct reduction in the income and purchasing power of Pakistanis by 13%. This is the first time in our history that our GDP in dollars has reduced even after three years.”
Miftah said despite the high demand and inflation in the past three years, the PTI’s tax collection has remained stagnant and has decreased in terms of percentage of GDP.
“The PTI has tripled inflation, increased food inflation more than five times than what it was during PML-N’s tenure, and substantially reduced economic growth,” Miftah claimed.
“After three years, even if we believe PTI’s controversial numbers, they have reduced real rupee GDP on a per capita basis.”
The tax-to GDP, which was 13% of the GDP when the PML-N government left with revenues doubling during its tenure, has now fallen to 10.9%. The taxation structure has also become more regressive as indicated by a higher share of indirect taxes.
“The fiscal deficits in the years under Imran Khan have been the highest ever in Pakistan’s history -- 9.1% and 8.1% -- and this year we will again unfortunately incur a budget deficit of over 8% of GDP,” Miftah said.
PML-N President Shehbaz Sharif claimed that the PTI government was misleading the public since the start of its tenure.
“Even the State Bank has contested the PTI’s growth rate of 3.9%,” the former Punjab chief minister added.
“The government's statistics have already become a subject of debate. This 'figure fudging' has come on top of the government's dismal performance and major failures.”
Dr Ayesha Pasha, former finance minister of Punjab, said the PTI government had claimed improvement in the economy and the sales of automobiles and motorcycles but the fact of the matter was that these indicators were still lower than what the PML-N had left behind.
“Tractors sales are down by 30.3% down, cars by 35% and motorcycles by 10% in fiscal year 2021 compared with 2018,” she added.
Former planning minister Ahsan Iqbal claimed that the country’s perception was damaged because of statements of Prime Minister Imran Khan.
“Foreign investors have stopped making investments. Pakistan’s core problem is political instability,” he added.
“The opportunity to attract Chinese investment in special economic zones has been lost.”
Former commerce minister Khurram Dastgir blamed the "mismanagement" of the PTI government for the increasing unemployment and poverty in the country.
“The cost of one kilogramme of sugar, one kilogramme of cooking oil, one kilogramme of moong pulse and one kilogramme of wheat flour was Rs347 in May 2018 that has now increased to Rs680 -- an increase of 96%,” he said.
“In three years, 20 million more people have slipped below poverty.”
Today the number of unemployed is around 8.5 million and the rate of unemployment is around 15%, which is the highest in the country's history, according to the PML-N paper.
Real wages for unskilled workers have fallen by 18% over the last three years. Federal and provincial public development spending in relation to GDP has also almost halved to 2.5% of the GDP only, further contributing to job contraction.
The main reasons for this incredible increase in prices, especially of food items, are the constant and large increases in the price of power and gas, the printing of money, and the largest budget deficits in Pakistan’s history, according to the PML-N.
PML-N Assistant General Secretary Bilal Kayani said the PTI had promised to end any addition to the power sector circular debt. "But despite raising power tariffs on an average of by over 60%, the circular debt today is both the highest in history and also rising at the fastest pace in history," he added.
He further noted that the circular debt would exceed Rs2.8 trillion, which is an increase of about 1.7 trillion in three years or almost Rs50 billion per month.
Miftah warned that after 40% devaluation, there would be only 1% increase in exports against what they were in the tenure of the PML-N -- that too in its third year.
Dr Ayesha Pasha said the government had not been able to finalise a deal with the IMF.
“A budget presented without the IMF agreement would lose its sanctity, increasing the chances of a mini-budget,” she added.
Former Privatisation Commission chairman Muhammad Zubair pointed out that the change of four finance ministers, five finance secretaries, five FBR chairmen, four chairmen of the Board of Investment, four economic affairs ministers and four industries ministers suggest that the prime minister was unsatisfied with the performance of his economic team.