Tarin warns of increase in inflation, unemployment

Former finance minister fears 20m people will fall below poverty line

ISLAMABAD:

Former finance minister Shaukat Tarin has painted a gloomy picture of the country’s economy, saying that inflation and unemployment will further increase due to the “flawed” budget presented by the coalition government led by the PML-N.

“The fuel prices will likely to go up further as the government has increased the petroleum levy as part of its commitment with the International Monetary Fund (IMF),” Tarin said while addressing a news conference alongside other PTI leaders, including Omer Ayub, here on Saturday.

In the federal budget 2022-23 announced on Friday, the government proposed increasing the petroleum levy by Rs20 to Rs50 per litre.

“He [Miftah] will not get any relief from the IMF. The government has presented a deficit budget while the GDP growth witnessed the highest increase during our government in 30 years,” he added.

The PTI senator claimed that inflation has gone up to 24% and unemployment will increase further. “We think that the unemployment rate will go up to 25-30% while increasing the petroleum levy will increase petrol further by Rs35 per litre. If so, how will the business grow?”

Tarin added that the PTI government collected the highest revenue in the country’s history and created 5.5 million jobs during its three-and-a-half-year rule.

He also expressed fear that 20 million people could fall below the poverty line as the incumbent regime had “discontinued” social safety programmes initiated by their government.

On the occasion, former federal minister Omar Ayub said that following hike in fuel prices, per unit of electricity was also expected to reach around Rs39 per unit while gas rates would also be increased by 400 per cent.

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The Pakistan Tehreek-e-Insaf had on Friday rejected the coalition government's budget for the new fiscal year, lambasting it for further unleashing “inflation and unemployment” upon people already feeling the pinch under the reign of what they denounced as “imported government”.

PTI Secretary-General Asad Umar said inflation would whizz skywards as it has already witnessed an increase of 24% as compared to the last year. “This [24% spike] is prior to the budget … where will it hit after the budget?” he wondered.

Daunting challenge

With one eye on the International Monetary Fund and the other on voters, Finance Minister Miftah Ismail on Friday proposed Rs9.5 trillion inflationary budget amid a daunting challenge to meet ambitious targets.
The new budget for fiscal year 2022-23 provides solace to the salaried class whose tax burden has been significantly lessened in addition to 15% increase in salaries of the inflation-stricken government employees.

But his single measure – the proposal to slap Rs50 per litre petroleum levy for additional Rs300 billion income – has not only overshadowed some good measures but may also make it challenging for the coalition partners to defend the budget.

The government has proposed Rs740 billion new taxes, including Rs440 billion tax measures proposed by the Federal Board of Revenue. Some of the major relief measures will be offset by the increase in petroleum prices rates due to Rs50 per litre levy along with 17% sales tax.