Experts at a seminar discussed the priority agenda of the incoming government ahead of the budget on Tuesday. They focused on macroeconomic stabilisation, development and economic growth. Titled “Agenda for Stabilisation and Economic Growth” the seminar was organised by Sustainable Development Policy Institute (SDPI).
National University of Science and Technology Dean Dr Ashfaque H Khan denounced the conventional method of managing fiscal crisis such as reduction in budget deficit and development programmes, saying it had brought suffering to the world.
Instead, he urged the new government to devise “forward looking macroeconomic policies” which according to him, will help strike a balance between “stabilisation” and developmental priorities”. About economic reform agenda, he said that there is greater need for resource mobilisation through reforming tax system and bringing efficacy in government expenditure particularly by restructuring or privitisation of public sector enterprises which are burdening the public exchequer. He also proposed proper fiscal decentralisation, energy sector reform, reforms in central bank, improving investment climate, promoting inclusive growth and removing ‘manufacturing defects’ of the new National Finance Commission (NFC) Award.
SDPI Deputy Executive Director Dr Vaqar Ahmed suggested the new government to increase efficiency of existing energy generation and transmission system and improve effectiveness of public sector development programme in short term.
“However, in the longer term an enabling environment must be provided to private sector to take a lead in the development process,” he added.
For this, he suggested privatisation or increased role of private sector in public sector enterprises, strengthening institutions that promote competition in markets, bringing down the tariff and non-tariff barriers to trade and long term investment in improving connectivity across the country.
Economic expert Safiya Aftab deliberated on social sector challenges in upcoming budget. She said that the federal government has put the bulk of resources available for social protection into Benazir Income Support Programme and this trend would most probably continue as the programme is likely to continue with the change of name.
Comparing last year’s development expenditures after the 18th amendment, she said that education expenditure has not shown significant increase in real terms in Punjab and Khyber-Pakhtunkhwa (K-P). She also cited that development expenditure falls in Punjab and Balochistan but is consistently rising in K-P mainly due to building of infrastructure damaged in war against extremism such as schools, hospitals and roads.
Moreover, she said that drastically raising the expenditure on health and education may not be the answer but provinces now need to start medium term planning exercises for use of additional funds disbursed through new NFC. In most cases, a reappraisal of priorities and improving the basic services is the need of hour, she added.
Published in The Express Tribune, May 22nd, 2013.