Tarin stresses need for higher savings rates and tax-to-GDP ratio – Journal

ISLAMABAD: Finance Minister Shaukat Tarin has warned that Pakistan will not be able to achieve sustainable economic growth and surpass the 4% growth rate figure unless savings rates and growth of the tax-to-GDP ratio are improved.

Speaking at a workshop on industrial policy formulation here on Thursday, he said the savings rate, which is currently around 15%, should be raised to 25%, while the tax-to- GDP must be increased by 10% to 20%.

Mr. Tarin said the government was focusing on improving the savings rate, for which it was using technology to increase revenue mobilization. At the same time, a strategy should be developed for investment in information technology, tourism and exports, he said.

The Minister of Finance was confident that the government would be able to achieve a GDP growth rate of between 4.5% and 5% in the current financial year, which shows that the government is on the trajectory of sustainable growth.

The government begins the process of formulating a “national industrial policy”

He said the gap between imports and exports is quite large – up to $40 billion – and needs to be narrowed in order to reduce the current account deficit.

Mr. Tarin referred to the historical context of Pakistan’s deindustrialization and emphasized the diversification of the exportable basket and the increase in manufacturing and agricultural production to get the country out of the chronic balance of payments problem.

The government has begun the process of formulating a “national industrial policy” to promote inclusive and sustainable industrial development for exports and investment, blaming previous governments for their inconsistent economic policies that have led to a decline in the manufacturing base and have proven detrimental to job creation in the country over the years. years.

To kick off the policy formulation, the Ministry of Industries and Production held a workshop in Islamabad on Thursday to develop inter-ministerial synergy for policy to promote inclusive and sustainable industrial development and shape a collective vision for growth. sustainable economy in Pakistan. . The workshop was organized in partnership with the Revenue Mobilization, Investment and Trade Program and UK Aid.

Industries and Production Minister Khusro Bakhtyar said the successful policy initiatives launched by the PTI government over the past three years to promote domestic production, exports and create jobs are seen as a major positive. for Pakistan.

“Our main objective in formulating the new policy is job creation and improved productivity, which will help improve economic growth and social stability in Pakistan,” he said.

Mr Bakhtyar said the localization of auto parts has increased to 45% and the government aims to increase it up to 65% in the coming years. Similarly, local manufacture of mobile phones resulted in the production of 22.12 million phones in the first year of the scheme’s introduction.

The Minister also highlighted key features of the National SME Policy to provide much needed support to SMEs across the country.

The process of industrialization has started in Pakistan with the development of industrial zones, industrial corridors, SEZs and different value chains, Mr. Bakhtyar pointed out, adding that the recent approach of creating industrial parks based on manufacturing across the country and allocating land based on the plug-and-play model would boost Pakistan’s manufacturing sector.

The workshop was also addressed by Prime Minister’s Climate Change Advisor Amin Aslam, Investment Board Chairman Azfar Ahsan and Planning Commission Deputy Chairman Jahanzeb Khan.

Mr. Aslam underscored the importance of introducing green technologies and energy savings in the manufacturing sector, while Jahanzeb Khan highlighted key areas of a three-year rolling growth plan focusing on a growth approach job-intensive.

Posted in Dawn, February 25, 2022

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