Country's economy on the right track, says finance minister

Stresses necessity of taxation for the nation's economic progress as there's simply no way around it

Rizwan Shehzad   April 24, 2024
Finance Minister Muhammad Aurangzeb is interviewed during the G20 Finance Ministers and Central Bank Governors' Meeting at the IMF and World Bank's 2024 annual Spring Meetings in Washington. PHOTO: Reuters


Finance Minister Muhammad Aurangzeb said on the floor of the National Assembly on Tuesday that the country’s economy was going in the right direction but people will have to pay taxes as there was no other way around to move ahead.

In the same breath, the financial czar also told the house that traditional banking was moving towards Islamic banking in line with a decision of the Federal Shariat Court (FSC), calling to implement the Riba-free banking system in Pakistan.

While referring to the FSC decision, the finance minister said that the court order as well as its implementation timeframe has already come, saying several bank branches converted from conventional to Islamic banking last year.

Following the FSC decision ordering Riba-free banking, the government had announced in 2022 that it would implement the FSC decision, saying that it would transform the existing interest-based banking system to an interest-free model in the next five years.

FM Aurangzeb said that things were being moved under a certain timeframe, including required legislation, saying this was about the domestic economy and the court decision’s implementation timeframe was five years.

“Under the State Bank [of Pakistan] and Ministry of Finance auspices, we are moving in that direction,” Aurangzeb told the assembly.

His response had come after members from treasury and opposition benches made fiery speeches, calling to end interest banking. He then wondered why the speeches were made by MQM-P’s Mustafa Kamal and PTI-SIC’s Ali Muhammad Khan when things were already in process, reminding the house that apart from the domestic economy, Pakistan is also connected to a global economy.

Aurangzeb then shifted to the economy and shared with the National Assembly that the fiscal position was far better than the previous year. He said that the current account deficit was in surplus and the foreign exchange reserves had reached $8 billion despite a payment to Euro bond.

He, however, added that the payment was made while relying on the interest-based system as the country was connected to the global economy, saying “We can’t do anything about it”.

He told the house that the fiscal year will end with $9 to $10 billion reserves by the end of this financial year as the next tranche of $1.1 billion will come by the end of the week. “This is equivalent to two months of import cover,” he said.

During his speech, Aurangzeb said that the country needed to go for structural reforms, increase its tax net and privatise the loss-making state-owned entities, adding that this could stabilise the economy, help Pakistan to exit IMF programs and attract foreign direct investment.

Meanwhile, the assembly passed a resolution calling for ensuring payment of minimum wages moved by PPP’s Agha Rafiullah. The resolution stated: “This House is of the opinion that the Government should take immediate steps to ensure the payment of the minimum wages announced by the Government in the Government-run departments as well as in the private enterprises.”

Although the resolution was passed, the finance minister responded that the federal government could only ensure the implementation of minimum wages to the extent of Islamabad, saying the provinces should also be asked to ensure its implementation. The minimum wage is Rs32,000 per month and, mostly the security guards, are deprived of it.

Rafiullah had even asked the speaker to enquire how much was being paid to people working at the cafeteria of the National Assembly, saying it would make it clear how the lower staff was being treated in NA and the capital.

In addition, PPP’s Dr Nafisa Shah’s bill seeking to end discrimination among the citizens by amending Article 25 of the Constitution was sent to the committee concerned. In addition, Shah’s bill proposing to give citizens a right to submit a public petition in matters of personal or collective nature to the National Assembly was also sent to the committee concerned.

Shah is seeking amendments in the Rules of Procedure and Conduct of Business in the National Assembly, 2007, stating that new Rules 295 and 296 shall be inserted to allow citizens to approach NA with public petitions.

The PPP lawmaker has proposed that under Rule 295 (1) (right of petition), “any citizen of Pakistan or any natural or legal person residing or having a registered office in the country shall have the right to address, individually or in association with other citizens or persons, a petition to the National Assembly on a matter which affects him, her or them directly.”

PTI Chairman Barrister Gohar and JUI-F’s Shahida Akhtar opposed the bill on the grounds that it would be equal to establishing a parallel system without having proper resources and expertise. The bill, however, was referred to a committee.

Meanwhile, PTI-SIC member Zartaj Gul raised the matter of Indian water aggression against Pakistan by developing the Shahpur Kandi Barrage on the Ravi River to stop water flow to Pakistan. Law Minister Azam Nazeer Tarar, however, admitted before the house that India has the right to the River Ravi water under a treaty and Pakistan can’t go for agitation.

To Gul’s fiery outburst as to why the law minister has admitted India’s right, Tarar replied that one should speak as per legal position and no one should do politics on such matters.


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