CARETAKER Prime Minister Anwaarul Haq Kakar Sunday stressed the need to improve the taxation system to boost the country’s economic growth. In an interview with PTV News, he said the government spending out of the accumulated tax should also be done in a responsible way. The Prime Minister emphasized that the private sector should take the responsibility of creating wealth and play the role of the engine of growth for the country, while the government’s focus should be on policymaking and taxing that wealth.
The private sector has a key role to play in boosting economic growth, being a key stakeholder of economic development and a contributor to the national exchequer. As the importance of private sectors and public-private partnerships is being realized, governments are increasingly turning to the private sector to help their economies grow. Pakistan too relied on the private sector as a primary producer of goods and services but the situation changed in early 1970s due to the flawed policy of nationalization that shattered the confidence of investors. The 1980s and onwards witnessed a reversal of this paradigm and the private sector again began to emerge and lead investment and economic activity. Beginning in the early 1990s, the country adopted a strategy of privatization, deregulation, liberalization and good governance to promote private sector development and almost all successive governments pursued this policy. However, private sector investment and growth has been mainly based in the services sector, especially telecommunications and financial sectors besides the real estate. Pakistan’s manufacturing base over the years has remained narrow with a concentration of investment in capacity enhancement and up gradation of facilities largely only in the traditional textile sector. Pakistan could not realize its dream of industrialization mainly due to interruptions in policy, political instability, law and order situation, security concerns, rampant corruption, lack of required infrastructure and energy crisis. Former Prime Minister Imran Khan and the incumbent PM also spoke about wealth creation by the private sector but how this objective can be achieved when we cannot ensure uninterrupted supply of electricity and gas, revise energy tariffs every now and then rendering our products uncompetitive in the global market and have one of the highest interest rates in the world. The government needs to listen to economists who plead for an enabling environment for private sector development by way of a defined industrial policy, competitive policy, an investment policy and stronger and capacitated regulatory institutions in key sectors of the economy.
