LAHORE - The financial experts, stock market analysts and the business community have said that the federal budget is not as per expectations of the business community as well as the masses but it offers some hope, pointing out that the government once again failed to impose taxes on the countrys elite. The Lahore Stock Exchange Managing Director Aftab Ahmed Ch said that after the recent round of meetings with Ministry of Finance and FBR, it was expected that CGT may be deferred at least for the individual investors who have been deserting the market causing volumes in FY11 to decline to 8-year low of Rs4 billion a day, down 50 percent from last year. This will not only affect the market depth and volumes but will have adverse implications to the government plan to privatize its units through the stock market. He said that the trend of IPO that slowed down last year with only one offering will remain affected thereby having impact on the capital formation. He said that individual investors will continue to pay 10 percent CGT if shares sold within 6 months and 8 percent between 6-12 months. Banks, insurance firms, mutual funds and other corporate will continue to pay CGT as per their specific rules and there is no change in this Budget. Dr Qais Aslam, a noted economist, said that budget hardly offer any relief for the poor or business community and has nothing to attract investment. He said that the government has again failed to raise taxes on the elite to cut a whopping deficit which has left us dependent on debt. He said that exempted sectors like agriculture, property and services have not been touched in the budget which is unfortunate. Dr Qais welcomed the announcement of adding 2.3 million people to the tax net saying that if materialised, it will resolve many problems. It is not a difficult task as we have four million commercial electricity connections and millions of commercial gas connections in the country. He said that budgetary framework is unrealistic both in terms of targets and resource mobilization. Budget estimates are routinely out of focus and thus often missed by wide margins. Fiscal deficit is expected to be in the range of 5.5-6.5 per cent of GDP as against the revised target of 5.4 per cent. Aftab Vohra, former VP Lahore Chamber of Commerce and Industry said that the issue of energy outages has not been given due attention which will result in missed collection and export targets and add to unemployment. He said that measures for sustainable growth were avoided which disappoints many. He expressed disappointment over absence of relaxation on machinery imports and lack of incentives to the industry that is reeling under multiple pressures. He said that no one can deny the presence of the black money in the country which should be channelled towards industry. He said that debt servicing eats up 1972 billion rupees which is a major threat in a situation where tax-to-GDP ratio is falling and less than 1 per cent pay taxes. The chairman of the FPCCI standing committee on electronics Pervez A Butt said that the business communitys confidence in the budget-making process is very low. This is partly because it is neither transparent nor is it based on a consultative process. IMF and multilateral development banks are wielding far greater influence in setting priorities for budget which are supporting economic revival. The government delayed the announcement of the on the diktat of IMF which not only undermined the integrity of the budget but also signaled further erosion of sovereignty over economic policy making in the country. FBR collected only Rs.1,310 billion in July-May period of 2010-11 against the revised target of Rs.1,588 billion despite imposing additional taxes worth of Rs.53 billion in March. The revenue target of Rs.1778 Billion for 2010-11 was highly ambitious. Inflation target is also missed mainly because of the impact of large fiscal deficit. Flood-related supply shocks also fed into inflationary pressures. Inflation was 14.1 per cent in July-April period of the current fiscal year as against the 9.5 per cent target. Inflation is expected to be around 15 per cent this year. The Lahore Chamber of Commerce & Industry Senior Vice President Sheikh Mohammad Arshad said that the government has failed to give any economic revival plan in the budget, while mainly focusing the international monetary agencies instructions and ignoring the proposals of the local trade bodies and other stakeholders. He said that the budget can in no way help achieve the proposed GDP growth target of 4.2 percent as it seemed that the document is prepared in haste. The LCCI Senior Vice President said that despite having knowledge of the gravity of the situation, the federal government has allocated meagre amount of Rs18 billion for new dams and water reservoirs. While pointing out the discriminatory approach, he said that out of all the eight Power distribution Companies (DISCOs) three major Punjab-based DICOs including LESCO, FESCO and GEPCO will not receive even a single penny relief from total subsidy of Rs122 billion while the KESC alone would be enjoying a subsidy of Rs24 billion. Salman Abduhu