ISLAMABAD Thanks to its poor economic policies, the government missed almost all major economic targets during the ongoing financial year 2010-2011. The official documents, which would also be the part of the Economic Survey 2010-11, clearly show the utter failure of the government in economic sphere as these disclose that Pakistans economy is likely to grow by only 2.4 per cent in the current fiscal year against the modest target of 4.5 per cent. As a result of the ill-conceived policies and poor performance of the incumbent government the stress caused due to the floods of 2010 remains, while the delay in implementation of economic reforms and dilapidated security situation continue to hamper growth in all major sectors. Massive floods took a heavy toll on agriculture and infrastructure while energy crisis coupled with decline in foreign direct investment soaked up business activity during the ongoing financial year, but the governments poor response to these challenges ensured deepening of the crises. As per the documents, the fiscal deficit is expected to remain higher, in the range of 5.5-6.5 per cent of the GDP by the end of current financial year against the revised target of 5.4 per cent. One of the main reasons behind soaring fiscal deficit is the low collection of the total revenue by Federal Board of Revenue (FBR) and high current expenditures of the government. The FBR has collected only Rs1,147 billion in July-April period of 2010-2011 against the revised target of Rs1,588 billion. The FBR has imposed additional taxes worth of Rs53 billion in March in order to meet the revised target and to curtail the fiscal deficit, however according to the figures and economic experts, the government might not be able to reach the revised target despite all the stop-gap measures. Similarly, the government failed to control the soaring inflation despite pursuing tight monetary policy. The inflation rate remained at 14.1 per cent in July-April period of the current fiscal year against the target of 9.5 per cent. The inflation rose due to governments heavy borrowing from banking to fulfil their expenditures, imposition of new taxes like General Sales Tax (GST) on agricultural inputs including fertilizers, tractors, pesticides and implements. The documents further reveal that inflation might end at 15 per cent at the end of ongoing financial year mainly due to the taxation measures. The agriculture growth is expected to remain at less than the target of 1.2 per cent. The major crops sub-sector was hit the most by floods causing colossal damages to cotton and rice. Major crops are expected to post a negative growth of four per cent against the target of 3.7 per cent; minor crops sub-sector is expected to post a considerable growth of 4.8 per cent. Production of cotton is expected to miss the target by 11.3 per cent; rice production is expected to fall by 30 per cent of the target. However, wheat production is expected to record 3.8 per cent growth over last years production levels. The overall picture of the industry also remains unsatisfactory as it registered negative growth of 0.1 per cent against the target of 4.7 per cent. Below par performance of industrial sector can also be attributed to persistently high interest rates and crowding out of private sector by high government borrowings. The large-scale manufacturing (LSM) is expected to post a modest growth of one per cent despite acute energy shortages and a steep decline in foreign direct investment. According to Quantum Index of Manufacturing (QIM), July-March 2011, negative growth was witnessed in food (-2.3 per cent), petroleum products (-4.8 per cent) and fertilisers (-6.8 per cent). The service sector also missed its target of 4.7 per cent, as this sector is contributing an expected growth of 4.1 per cent in GDP mainly due to damage caused by floods and resultant slowdown of related industries affected the service sector. According to the documents, total investment had fallen significantly during 2010-2011 and expected to be 13.4 per cent as compared to the target of 17.9 per cent of the GDP. This position is largely a reflection of deterioration of law and order situation, which reduced the foreign direct investment and increased the cost of investment. Meanwhile, the FDI shows a decline of 2.29 per cent during July-March period of 2010-11 with portfolio investment falling by 33.1 per cent. However, due to robust growth in countrys exports, the trade deficit reduced by 2.2 per cent during the first nine months (July-March) of the ongoing financial year and touched the level of $eight billion against the target of $ 11.7 billion. This improvement in trade account is mainly due to an increase of $ 3.6 billion in exports earning which more than offset the rise of about $ 3.4 billion in imports bill. Similarly, workers remittances have witnessed rising trend during the period July-March 2010-11, touching a level of about $ eight billion as against $ 6.5 billion of the corresponding period of previous year registering an increase of 23.1 per cent. Keeping this trend in view, remittances for the full-year are estimated to reach upto $ 12 billion. Meanwhile, with estimated trade deficit at $ 11.3 billion and workers remittances of about $ 12 billion, the current account deficit is estimated to decrease to around $ one billion in 2010-11 from the previous years deficit of $ 3.9 billion. According to the documents, the gross aid disbursements are expected to reduce to the level of $3.6 billion in 2010-11 as compared to $ 4.1 billion recorded previous year. Allowing for other capital inflows, the overall balance is likely to be in surplus by $ 6.8 billion in 2010-11 compared to a surplus of $ 1.3 billion in 2009-10.