Need for economic revival

The National Assembly has approved the Federal Budget 2020-21 presented by the PTI-led federal government. The incumbent government has not introduced any new tax in this budget, which will have a positive impact on the business community. However, due to the ongoing coronavirus pandemic, the country’s exports have declined through which the economy has been affected badly.

The decision of the government not to introduce any new tax is commendable, but there are also fears in the business community that the government will soon present a mini-budget in which all accounts will be settled, just like the sudden increase in the prices of petroleum products by more than Rs. 25 which has badly affected the masses. Oil prices in the international market had not risen as fast as the government of Pakistan has done.

The effects of the increase in petroleum prices will be bad for our economy because, on one hand, the government’s motive is to eradicate poverty from the country and on the other hand by increasing the prices of petroleum products by Rs. 25 it has dropped inflation bombs on the nation. The country has also witnessed a rise in the price of essential commodities due to the increase in fuel prices.

After the federal budget, Pakistan Stock Exchange is witnessing a bullish trend. The index is hovering near the 35,000 level, mainly due to rising petrol prices and relief to the construction sector by Prime Minister Imran Khan. Activities in the cement and steel sector have increased in the country due to the relief for the construction sector. At the same time, the federal government has indicated that it will not increase prices in the pharmaceutical sector in the upcoming days.

With the government cutting interest rates further to 7%, the banking sector is witnessing a downward trend in business and people have started withdrawing money from banks due to low-interest rates. The pressure on the banking industry has been increased.

If the government does not introduce any taxes or does not announce any new mini-budget in the upcoming days, it is possible to revive the country’s economy. However, if the government, under pressure from the IMF, imposes new taxes, raises interest rates, or raises electricity and gas prices, Pakistan’s economy will be hit hard, and the country’s GDP will fall further.

We appeal to the government to take practical steps to revive the economy so that the sufferings of the people of Pakistan can be reduced and the wheel of the economy can move faster.