The expectations from the Pakistan Muslim League-Nawazs (PML-Ns) maiden budget are high but information leaked out to the media reveals that policy makers have decided to keep the focus on industrialists (one of the partys key voter groups), rather than ordinary citizens ---------- (DAWN News Report)
Ahead of the May 11 elections, the PML-N assured frustrated voters across the country that they would show them greener pastures. As a result, they won a majority, and more significantly, a thumping majority in Punjab. It appears that the dividends, as a result, will also be given to the same province.
The composition of the cabinet further confirms this fear key federal minister positions have been taken up mostly by politicians from Punjab. This is important, since the cabinet takes decisions particularly pertaining to the allocation of resources and other key policy decisions.
The June 12 budget will be a acid test for the PML-N as to whether the party believes in the cause of the federation, or whether it will just focus on Punjab in terms of development, allocation for mega projects or schemes for youth employment. Otherwise, it will prove sufficient for anti-Punjabi slogans to resurrect themselves.
In essence, winning elections in one province or losing in others should not guide the budget formation. Moreover, laptop schemes will no longer be an attraction for a burgeoning youth demographic which wants jobs no matter what province they represent.
Nearly 60 per cent of the youth in the age group of 15-24 in Pakistan is idle, unemployed, not studying, not in training and not looking for jobs, according to a World Bank Development Report. The youth unemployment ratio is at seven per cent compared to the overall unemployment rate of a projected five per cent. Even those who work, do unpaid jobs. If paid, they are less likely to have access to social security.
This demographic need jobs which can only be created by reviving the countrys industrial growth. This may not be an easy job, as de-industrialisation is deep-rooted.
For the past few decades, the manufacturing sector has been beset with a host of problems, including an absence of an industrial policy, a crippling energy crisis, and a narrow industrial base.
For industrial development, the PML-N will have to finalise the industrial policy, coupled with fiscal incentives to resolve the energy problem, and also encourage the use of alternative sources of energy like coal-based captive power generation through incentives like tax breaks. It should club together all ministries created for looking after the affairs of various industries, like the ministries of industry, production, textile and commerce, into one single ministry, Ministry of Commerce and Industry, as is the case in countries like India. A single ministry deals with production as well as exports in these countries to remove overlapping in policy formation.
Meanwhile, a draft National Industrial Policy was evolved in May 2011, but it was not implemented. While this looks good on paper, it raises the question as to how targets will be achieved. However, these targets can be revisited to be fine tuned.
For carrying out development, the government needs money that can be raised through taxes, especially from taxing those who fall in high income brackets. It also needs to reduce expenditure on wasteful projects.
The PML-N, on the other hand, is set to introduce over Rs150 billion new taxes in the upcoming budget which are likely to hit the middle class. As per the direction of the new finance minister, the taxation proposals for the budget are being based around three main points facilitate local industrialists, broaden the narrow tax base and bolster revenue collection in the next fiscal year.
The industrialists will get more protection from cheaper imports. This protectionist policy of the government will add to the profits of the industrialists, who supported PML-N in industrial cities like Faisalabad, Gujranwala and Sialkot.
Tax collection
Again, undue support for industries will be costly for the government exchequer as well. Data shows that more than 2.03 million wealthy people in Punjab are not paying taxes. Contrary to this, less than one million people in Sindh, 386,233 in Khyber Pakhtunkhwa, 69,174 in Balochistan, 5,311 in Gilgit-Baltistan, and 46,657 in Pakistan-administered Kashmir are evading taxes.
At the same time, the tax return filing rate in Punjab is behind that of the rest of the country. Around 54 per cent of taxpayers did not file returns here in 2012. In 2012, Lahore emerged as a major city where 439,901 wealthy people did not pay taxes. It was followed by 208,274 people in Rawalpindi, 165,698 in Faisalabad, 116,748 in Sialkot and 110,864 in Gujranwala. This will be a test case for the PML-N to improve tax compliance in the province which gave it a thumping electoral victory.
In Sindh, Karachi emerged as the leading city where 726,375 people did not figure on the tax roll, followed by Hyderabad at 65,188.
http://beta.dawn.com/news/1017547/budget-2013-2014-development-jobs-increased-taxes-must-be-priority
Ahead of the May 11 elections, the PML-N assured frustrated voters across the country that they would show them greener pastures. As a result, they won a majority, and more significantly, a thumping majority in Punjab. It appears that the dividends, as a result, will also be given to the same province.
The composition of the cabinet further confirms this fear key federal minister positions have been taken up mostly by politicians from Punjab. This is important, since the cabinet takes decisions particularly pertaining to the allocation of resources and other key policy decisions.
The June 12 budget will be a acid test for the PML-N as to whether the party believes in the cause of the federation, or whether it will just focus on Punjab in terms of development, allocation for mega projects or schemes for youth employment. Otherwise, it will prove sufficient for anti-Punjabi slogans to resurrect themselves.
In essence, winning elections in one province or losing in others should not guide the budget formation. Moreover, laptop schemes will no longer be an attraction for a burgeoning youth demographic which wants jobs no matter what province they represent.
Nearly 60 per cent of the youth in the age group of 15-24 in Pakistan is idle, unemployed, not studying, not in training and not looking for jobs, according to a World Bank Development Report. The youth unemployment ratio is at seven per cent compared to the overall unemployment rate of a projected five per cent. Even those who work, do unpaid jobs. If paid, they are less likely to have access to social security.
This demographic need jobs which can only be created by reviving the countrys industrial growth. This may not be an easy job, as de-industrialisation is deep-rooted.
For the past few decades, the manufacturing sector has been beset with a host of problems, including an absence of an industrial policy, a crippling energy crisis, and a narrow industrial base.
For industrial development, the PML-N will have to finalise the industrial policy, coupled with fiscal incentives to resolve the energy problem, and also encourage the use of alternative sources of energy like coal-based captive power generation through incentives like tax breaks. It should club together all ministries created for looking after the affairs of various industries, like the ministries of industry, production, textile and commerce, into one single ministry, Ministry of Commerce and Industry, as is the case in countries like India. A single ministry deals with production as well as exports in these countries to remove overlapping in policy formation.
Meanwhile, a draft National Industrial Policy was evolved in May 2011, but it was not implemented. While this looks good on paper, it raises the question as to how targets will be achieved. However, these targets can be revisited to be fine tuned.
For carrying out development, the government needs money that can be raised through taxes, especially from taxing those who fall in high income brackets. It also needs to reduce expenditure on wasteful projects.
The PML-N, on the other hand, is set to introduce over Rs150 billion new taxes in the upcoming budget which are likely to hit the middle class. As per the direction of the new finance minister, the taxation proposals for the budget are being based around three main points facilitate local industrialists, broaden the narrow tax base and bolster revenue collection in the next fiscal year.
The industrialists will get more protection from cheaper imports. This protectionist policy of the government will add to the profits of the industrialists, who supported PML-N in industrial cities like Faisalabad, Gujranwala and Sialkot.
Tax collection
Again, undue support for industries will be costly for the government exchequer as well. Data shows that more than 2.03 million wealthy people in Punjab are not paying taxes. Contrary to this, less than one million people in Sindh, 386,233 in Khyber Pakhtunkhwa, 69,174 in Balochistan, 5,311 in Gilgit-Baltistan, and 46,657 in Pakistan-administered Kashmir are evading taxes.
At the same time, the tax return filing rate in Punjab is behind that of the rest of the country. Around 54 per cent of taxpayers did not file returns here in 2012. In 2012, Lahore emerged as a major city where 439,901 wealthy people did not pay taxes. It was followed by 208,274 people in Rawalpindi, 165,698 in Faisalabad, 116,748 in Sialkot and 110,864 in Gujranwala. This will be a test case for the PML-N to improve tax compliance in the province which gave it a thumping electoral victory.
In Sindh, Karachi emerged as the leading city where 726,375 people did not figure on the tax roll, followed by Hyderabad at 65,188.
http://beta.dawn.com/news/1017547/budget-2013-2014-development-jobs-increased-taxes-must-be-priority
