Interim Prime Minister Anwarul Haq Kakar has greenlit a cabinet committee dedicated to revitalizing the nation’s economy, empowering it to propose strategies for long-term economic expansion and offer vital stimulus packages to the private sector. The PM has also endorsed an expanded 11-member committee in response to the dire economic circumstances.
The Prime Minister’s Office has introduced a pivotal addition to this committee: Dr Waqar Masood Khan, Advisor to the PM on Finance. His inclusion was not recommended by the Finance Ministry, raising questions about his appointment as advisor to the Prime Minister. Due to this backdrop, Dr. Khan has yet to assume his role at the Q-block, the core of the finance ministry’s operations, reported Tribune.
The cabinet committee, chaired by Finance Minister Dr. Shamshad Akhtar, has been convened to develop a plan for economic revival within a tight two-week timeframe.
The committee incorporates cabinet members including Minister of Commerce, Industries and Production Ejaz Gohar, Minister of Planning Sami Saeed, Minister of Communication, Maritime Affairs and Railways Shahid Ashraf Tarar, Minister of Petroleum and Power Mohammad Ali, Minister of Law and Justice Ahmad Irfan Aslam, Minister of Information Technology and Telecommunication Umar Saif, and Planning Commission Deputy Chairman Dr Jehanzeb Khan.
This comes as Pakistan operates under a short-term IMF program, where commitments to uphold a stringent fiscal and monetary framework have been made. This includes no further subsidies and adopting a market-oriented exchange rate regime.
With these constraints, there is limited space to propose modifications to the established framework, especially for a caretaker cabinet with a constitutional term ending on November 9.
Pakistan registered a record federal budget deficit of Rs. 6.7 trillion in the previous fiscal year, mainly due to unsustainable interest payments. Amidst a debt-driven growth model and suggestions that economic growth beyond 3.8% leads to fiscal and current account deficit challenges, Pakistan grapples with divergent growth projections. The previous government targeted 3.5% GDP growth for this fiscal year, while the IMF and central bank have projected figures ranging from 2% to 3%.
The committee’s mandate includes reviewing and recommending measures to enforce fiscal discipline. The committee will also recommend initiatives for economic and private sector rejuvenation, focusing on immediate actions. It will explore ways to stimulate private investment by streamlining and rationalizing incentive frameworks.
Industries such as textiles and automobiles, previously buoyed by state subsidies, have faced shifts such as the withdrawal of electricity subsidies under the IMF program. The committee will also address issues of competitiveness and business-friendly environments. The committee will strive to bolster export growth, diversification, and value addition while removing obstacles to expedite foreign investment inflow.
In parallel, a separate cabinet committee also has been formed to propose energy policies. The committee for economic revival will deliberate on policy measures to enhance income, employment prospects, and overall economic growth in the medium term.
Source: Pro Pakistani