There is no incentive and relief for the country’s ailing trade and industry. Pakistan is facing severe energy crises but no concrete measures were announced to overcome the crises.

Giving his reaction after the budget speech of Federal Budget 2011-12, Mahfooz Elahi, President, Islamabad Chamber of Commerce & Industry (ICCI), said that no pragmatic steps have been announced by the government to create job opportunities and provide relief to the masses who were stricken by the sky-rocketing price hike.

He said that the allocation of Rs.2.1 billion for the revival of industrial sector was inadequate, adding that very diminutive money has been set aside in the budget for fast crumbling infrastructure. He maintained that the budget was not reflected by any long-term planning and strategy to address key issues confronted by the country. Elimination of various subsidies would push inflationary pressure upward as the impact would ultimately pass on to the consumer, he added. 

ICCI President said that the announced outlay did not match with budget document that put the federal expenditures at Rs.2.767 trillion. He said that the revenue target of Rs.1.952 trillion was unrealistic, withdrawal of subsidies was an overambitious attempt that would be difficult to implement and 4 percent fiscal deficit target was simply not achievable. He said that reduction in sales tax rate from 17 percent to 16 percent would be offset by reduction in subsidies and hence would have no significant impact in reducing inflation.

He said that despite knowing about the ailing energy sector, the government has allocated only Rs.18 billion for new dams and water reservoirs, adding that budgetary framework was unrealistic in terms of targets and resource mobilization.

Mahfooz Elahi said that around Rs.1 trillion would be paid in debt servicing which was more than 50 percent of the tax revenue target. He said every sector should be brought under the tax net at any cost, otherwise the government would face heavy fiscal deficit, which would compel it to more borrowing from local and foreign financial institutions.

ICCI President, however, appreciated the withdrawal of special excise duty and the announcement of gradual elimination of federal excise duty.