Muhammad Zahid Rifat
THE incumbent federal government of PML (N) headed by Prime Minister Shahid Khaqan Abbasi is stepping down on May 31, 2018 after successfully completing its scheduled constitutional five years tenure and achieving accelerated economic growth through its vibrant and down to earth realistic policies in various sectors.
The federal government has also presented record 6th budget in its five year tenure on April 27 with total outlay of Rs 5932.5 billion, which is quite appreciably 16.2 per cent higher than the size of budget estimates of outgoing financial year 2017-18 and got it passed by the National Assembly in second attempt with the approval of the Finance Bill 2018 perhaps for the first time incorporating good number of recommendations made by the members of the upper house of the parliament, the Senate.
The PML (N) Federal Government had come into power in 2013, after winning the general elections and securing two third majority in the National Assembly. This piece briefly gives facts of figures of different aspects of economy what it was in 2013 and what it is now in 2018 when the federal government is stepping down amidst expectations and hopes that it will be able to regain powers for another five years by winning the upcoming general election , to be held in the last week of July 2018 under the supervision of the caretaker set up at the national and provincial levels, on the basis of its impressive economic performance.
According to facts and figures available from official sources concerned, Gross Domestic Product (GDP) real growth presently commendably stands at 5.8 per cent which is the highest in as many as 13 years. Accordingly, the size of the national economy has also expanded from Rs 22,385 billion in fiscal year 2013 to Rs 34,396 billion in FY 2018 registering an increase of more than Rs 22000 billion in just five years period. As regards fiscal difficult, which is talked about greatly, the outgoing federal government has followed a policy in determined manner of fiscal consolidation because of which fiscal deficit has been reduced from bit high 8.2 per cent of Gross Domestic Product (GDP) to 5.5 per cent this year.
Per Capita Income has also showed upward trend and has increased to Rs 180204 in FY 2018 from Rs 129005 five years back in 2013 showing a rise of more than Rs 50,000 during the period under review. Inflation level on average had remained around 12 per cent between 2008-13 and now for the first nine months from July 2017 to March 2018, the level of inflation has been 3.8 per cent which is quite good to say the least.
Federal Board of Revenue (FBR) is the country’s main agency for taxes collection and revenue generation. During fiscal year 2012-13, FBR collection was recorded at Rs 1946 billion. For the outgoing financial year 2017-18, it is estimated that the taxes collection will be around Rs 3935 billion. Tax to GDP ratio, which was 10.1 per cent in fiscal year 2012-13, is expected to increase to 13.2 per cent this year by end June 2018.
Agriculture sector is an important sector which somehow has not been performing well for some ears due to various years. As a result of the government policies and measures and incentives for the farming community it has registered turn around and has shown the highest growth in the past 13 years at 3.8 per cent currently. Likewise, agriculture which was only Rs 336 billion five years ago has increased to Rs 570 billion by February 2018 and is likely to go still higher at Rs 800 billion, more than doubled , when the current financial year closes by end June 2018.
Country’s industrial production has grown at 5.8 per cent presently which is highest in a decade. Likewise, the Services Sector which includes banks, transportation, housing etc has grown by 6.4 per cent which is also the highest in a decade. Country’s imports have increased by 17 per cent in the first nine months of the current year July 2017 to March 2018. These essentially required imports are augmenting productive capacity of the national economy for higher export volumes in the future. However, with the completion of great game changer China-Pakistan Economic Corridor (CPEC) related projects, presently under implementation and at varying stages of their completion all over the country, this year and the recent exchange rate adjustment , imports are likely to somewhat reduce to a moderate level.
Exports have been a challenging area of the national economy for the federal government, due to both internal and external factors. However , as a result of concerted efforts, particularly announcement by the federal government in January 2017, export package of Rs 180 billion along with many incentives, as well as exchange rate adjustments, exports have turned around and increased by 13 per cent in the first nine months of the outgoing financial year and as much as 24 per cent alone in March 2018 on shipment basis.
As for the country’s foreign exchange reserves are concerned, due to increasing trade deficit there has been a gradual decline in the reserves with the central i.e. State Bank of Pakistan. Collectively, the reserves with the State Bank and the private banks of the country stood at 17.5 billion dollars in the first week of April 2018. Large number of Pakistanis are settled and working in different countries around the globe for varying periods and their remittances back home through proper channel to their families and these remittances make positive and encouraging contributions to the national economy by giving boost to the foreign exchange reserves. Quite appreciably after remaining bit low for sometime, remittances have also started showing an upward trajectory. Accordingly, remittances by overseas Pakistanis have increased by 3.6 per cent during July 2017 to March 2018 period as compared to the corresponding period of last year and stood at 19.3 billion dollars.
Policy rate of the State Bank of Pakistan has come down gradually from 9.5 per cent in June 2013 to 5.75 per cent in 2017, which was the lowest in many decades altogether. Similarly, mark up rates of Export Refinance Facility have also quite appreciably been reduced from as much as 9.5 per cent in 2013 to just 3 per cent in June 2016. Mark up rate on Long Term Finance Facility has also been brought down from 11.4 per cent to 5.6 per cent.
Resultantly, credit to the private sector has grown to Rs 441 billion till first week of April 2018 as compared to only Rs 93 billion in fiscal year 2012-13 and this has commendably contributed to expansion of business activity in the country. Registration of new companies is also an indication of the accelerated economic activity and flourishing conducive business environment in the country.
According to the figures, large number of 8349 new companies were registered till March 2018 as compared to 5883 companies which were registered during the same period last year. It is pertinent to mention here that during the last five years, pretty higher number of 33285 new companies were registered as compared to almost half number of 17079 companies registered during the previous five years period between 2008 to 2013 which is also reflection of accelerated economic activity in the country during the five years rule of outgoing incumbent federal government of ruling party PML (N).