Islamabad Chamber of Commerce & Industry has termed the Federal Budget 2014-15 a constructive effort, especially in the prevailing circumstances to put the economy in the right direction. The announcement of long-term financing schemes for exporters, incentive packages for textile and agriculture sectors and reducing corporate tax are the initiatives that could pave way for fast economic revival. Energy crisis was the core reason for the slow growth economy and allocation in budget for energy sector will help in addressing this major problem. 

 

Shaban Khalid, President, Islamabad Chamber of Commerce & Industry said that instead of announcing cosmetic measures, government has addressed some main issues of private sector, which is encouraging. He said consultation process with stakeholders was the hallmark of this budget which resulted into preparation of result-oriented proposals. ICCI proposals for enhancing tax net have also been given due space in the budget. 

 

He said improving forex reserves, maintaining inflation to single digit are positive achievements. He said government intention to bring down fiscal deficit up to 4 percent is hopeful sign. Increasing PSDP to Rs.525 billion will contribute in developing better infrastructure. Construction of Lahore-Karachi motorway and improving Pakistan Railways will bring down cost of doing business, facilitate easy movement of goods and provide affordable transportation facilities. 

 

Shaban Khalid said establishment of EXIM bank along with improving export refinance facility will go a long way in improving country’s exports as it will address the financing needs of exporters. He said incremental incentives to exporters will also help in improving exports. Incentives announced for agriculture sector, especially for cold storage and value addition are well-timed initiatives as agriculture absorbs 43 percent of labor force and contributes significantly to country’s GDP. Insurance cover and loan schemes for agriculture sector are encouraging steps. 

 

Tax slabs on various amounts of electricity to bring informal sector into formal sector are steps to promote documented economy. Tax on property transactions will help in developing a fair tax system. Government intentions to increase direct tax and decreasing indirect tax are the measures that will promote progressive tax system in the country. Reduction of customs duty to maximum 25%, will reduce smuggling while increase in salaries and pension will provide good relief. We look forward that overall impact of the budget will be positive on the growth of economy and help in achieving progressive growth target of the economy. However, its full implications will be analyzed after study of budget in detail.