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Shaken economy of Pakistan

Muhammad Nadeem Bhatti

The economy of Pakistan is the 23rd largest in the world in terms of purchasing power parity (PPP), and 38th largest in terms of nominal gross domestic product. Pakistan has a population of over 207 million (the world’s 5th-largest), giving it a nominal GDP per capita of $1,641 in 2018, which ranks 147th in the world and giving its PPP GDP per capita of 5,709 in 2018, which ranks 130th in the world for 2018. However, Pakistan’s undocumented economy is estimated to be 36% of its overall economy, which is not taken into consideration when calculating per capita income. Pakistan is a developing country and is one of the Next Eleven countries identified by Jim O’Neill in a research paper as having a high potential of becoming, along with the BRICS countries, among the world’s largest economies in the 21st century. The economy is semi-industrialized, with centers of growth along the Indus River. Primary export commodities include textiles, leather goods, sports goods, chemicals, carpets/rugs and medical instruments.
In Pakistan, most important categories in the consumer price index are food and non-alcoholic beverages (35 percent of total weight); housing, water, electricity, gas and fuels (29 percent); clothing and footwear (8 percent) and transport (7 percent). The index also includes furnishings and household equipment (4 percent), education (4 percent), communication (3 percent) and health (2 percent). The remaining 8 percent is composed by recreation and culture, restaurants and hotels, alcoholic beverages and tobacco and other goods and services. Exports in Pakistan decreased to 261669 PKR Million in February from 283372 PKR Million in January of 2019. Exports in Pakistan averaged 44831.65 PKR Million from 1957 until 2019, reaching an all time high of 287798 PKR Million in December of 2018.Main exports of Pakistan are mineral fuels (19 percent of the total shipments), manufactured goods (19 percent) and beverage and tobacco (13 percent). Others include: food and live animals (11 percent), crude materials (11 percent), chemicals (11 percent), machinery (8 percent) and miscellaneous articles (8 percent). Main export partners are United States (13.6 percent), China (11 percent of the total export), United Arab Emirates (8.5 percent) and Saudi Arabia (8.5 percent)
Pakistan’s government has hiked fuel prices by up to 6.45 percent, as the country continues to face widening fiscal and current account deficits amid spiraling inflation On Monday, countrywide fuel prices increased to Rs98.89 per litre, with diesel prices at Rs117.43.
According to the Statistics of Pakistani government the price hike is 9.41% which is the highest rate in the history of Pakistan. Only in February and March price hike is 1.42%. If we compare this percentage with other countries of Asia then we will be astonished. In Afghanistan the price hike rate is 4%, In China its 1.7%, In India 2.57%. In Bangladesh 5.47% and Sri lanka 4.3%. So we are the most expensive country in our neighborhood. And this is under that government who use to say that Pakistan’s Total income is 3500000 million and they will bring it to 80000000 million Rupees and it is not even a big task for them. And FBR will be cleaned and stronger organization. But still anyone with big connection in FBR can easily manipulate with tax system.
And this all was 8 month ago. And today things are very different. Food items are 1.5 to 2% more expensive. Electricity rates are averagely 1.27 rupees high per unit. Gas rate increased 143% and rents increased 25%. Medicine prices increased 200%.Medical centre and Hospitals are increasing its rates without any hesitation. There is no price control on any department. Petrol prices increase with 6 rupees and condition of revenue is that in last 7 months there was a huge decrease in sales tax of rupees 32600 Million rupees. The total tax collection decreased with 236000 million, which is expected to be 300000 Million till June. And after that it will be more difficult for government to maintain a beneficent budget for the nation. According to statistics because of these price increases more than 4 Million people are now under the poverty line and more than 1 million people are expected to be jobless soon. And still it is said that Finance minister of Pakistan will bring a comprehensive road map to bring back Pakistan economy. Question is, it’s been 8 months of this government and the finance minister is yet to bring its road map then who was doing these price increases and mini budget things in last 8 months? Nation is suffering a lot. But still we don’t know what is going to happened next. Let’s see what Prime minister and Finance minister wants.
But Due to all extreme activities in the sense of enhancing the prices of common utilities are getting harder. The survival of low class people is getting miserable but nobody is watching this face of actuality. Proudly they are announcing the coming near future will be fruitful for the every person of Pakistan but into the existing days they should have a margin to maintain their lives according to their standards. Dear friends it’s been happening since last decades, last government and the existing government, the vision of concept to run a country is unclear. Nobody having the standard working policies and values to maintain the life of common man, which is important to bring them into the level of success by their voting values. These standardization should we understand the future of Pakistan unless the industry is not been privileged the number of taxes are being embossed upon them. It is a symbol to not to appreciate them. They are having their investments for the country of Pakistan. They should be given privilege being awarded but these situation are not satisfactory to the country so automatically the law and order situation will show its cruel face which will be unable to handle by the management of existing government. The government should be giving the industrial a good package of taxes and Subsidies to run their factories. In this regard they should cover more quantity of unemployment in the shape of jobs. But when we go through to watch the actual faces of working economy which is so harsh and not into the favor of common man and the tax policies are so difficult that’s why we have to have thing upon to taking the prime existence of Amnesty schemes. Which are still not successful in Pakistan because the kind of amount a person declare at the said percentage although which gives the attraction to common man to make their money white But the same money he have to show in his income tax return so it get automatically payable by another tax which is called income tax. This is the main reason to be not successful this kind of policies in Pakistan. In this regard corruption values can enhance their standards and every person of this country will try to go for the easy positive movement for his living hood which can be a kind of corruption. We are responsible for offering them these values to get corrupt and take the sponsor of corrupt values of corrupt officers in any department of Pakistan.
—The writer is an entrepreneur & senior economic analyst and (Chairman) Federation Pakistan chamber garment industry committee, Small & medium industrial association bund road Lahore and Pakistan columnist council Lahore Pakistan. He can be reached at figure786@hotmail.com