ISLAMABAD June 4 (APP):- Embarking on a fundamental change of the development paradigm, new strategy aims at fostering sustainable and more equitable growth by means of structural improvements in the productive sectors of country’s economy, involving wide range of policy actions across the sectors. Enhancing the tax-to-GDP ration is a key plank of the government economic strategy. A proposed law to implement a broad-based Value Added Tax (VAT) with minimal exemptions from July 01, 2010 has been present to the parliament in this regard, according to Economic Survey 2009-10 unveiled here on Friday.
In addition, other measures such as improving tax administration and
reinstating tax audits have been taken. The cumulative effect of these
policy measures is expected to be an increase of Pakistan’s Tax-to-GDP
ratio to 13 per cent by 2013 from 8.9 per cent in 2008-09.
Under reform of the power sector, electricity tariff has been raised
between 40- 55 per cent in less than two years, in an effort to reduce
the level of subsidies absorbed in the budget, while simultaneously
moving to a full cost-recovery tariff for the power utilities. Under a
new Act of parliament, adjustment in tariff for changes in fuel prices
for power generation has been made automatic.
A Cabinet Committee on Restructuring (CCOR) has been formed to
restructure key public sector enterprises (PIA, PEPCO, Railway, TCP,
USC, Pakistan Steel Mills, NHA) with a view to stop leakages caused by
annual losses amounting to approximately 1.5 per cent of GDP.
The eventual aim, the Survey said, is to turnaround these Public Sector
Enterprises into profitable, self-sustaining ventures under
Public-Private Partnership mode.
Under Social Protection, the government has launched the Benazir Income
Support Program (BISP). An allocation of Rs 70 billion has been made in
the federal budget 2009-10 with an objective of targeting 5.5 million
poor and vulnerable households in Pakistan with a cash transfer of Rs
1000 per month to each.
The size of BSIP makes it the largest social protection scheme in the
country’s history and it works in conjunction with other safety nets
such as Bait-ul-Maal, Zakat Fund and provincial programmes such as the
Sasti Rot scheme.
The government, Survey stated successfully concluded the Seventh
National Financial Commission (NFC) Award - only the fourth in
Pakistan’s entire history and the first for the last 19 years. This
Award greatly augments the quantum of resource transfer from the Centre
to the Provinces.
In conjunction with the higher resource transfer to the provinces, the
Centre will also devolve some major functions and expenditure heads to
the sub-national government in line with the provision of the 1973