ISLAMABAD- The Pakistan Economy Watch (PEW) stressed upon the importance of reduction in the development budget since the government has not only overestimated its income figures but has also understated its expenditures in the new budget 2014-15.
The government’s focus on savings pushed it to cut last year’s development budget by Rs 115 billion due to missed revenue targets and enhancements in expenditure allocation by Rs 83 billion in 2013-14.
Dr. Murtaza Mughal, President PEW, feared that the situation might not change this year since the country’s economy is still in an early recovery phase, hence the state would have to make reductions in the Public Sector Development Program (PSDP), which is worth Rs 525 billion.
This decision will have serious implications on not only the current government’s image but also on its economic development program. Currently, economic revival requires immediate shift from indirect taxes to direct taxes. In addition, efforts need to be made to strengthen the agricultural sector. Hydel power needs to be given preference over thermal power generation. Moreover, FBR also has to strive to identify tax-evaders so that excessive reliance on foreign and domestic loans can be avoided, Dr. Mughal concluded.