News President, PM review financial challenges

 ISLAMABAD: President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani on Thursday reviewed the economic situation in the country. At a meeting here at the Aiwan-e-Sadr, presided over jointly by the president and prime minister, recent initiatives introduced with regard to financial reforms, mid-term overview of the financial situation in the country and challenges thereof were mulled over.

Performance of the agricultural sector, mega industries, balance of payments, inflation and foreign remittances were also reviewed. The meeting also discussed the reforms agenda of the FBR.
Sources said that the meeting approved short- and long-term measures aimed at arresting the process of deterioration of the economy. Its guiding principles include comprehensive measures to reduce the budgetary deficits.
It was agreed that the government shall cut its expenditures and look for new avenues for increasing resources by strictly adhering to the financial discipline in governmental institutions. The meeting agreed to restore the IMF programme so that friendly countries could be attracted to help the country.
The high-level meeting allowed the FBR to expand the tax net to increase revenues. Economic experts told the president and prime minister that despite unstable international economic situations, the year 2011 would be better for Pakistan and the economic fallout of devastating floods would start reducing. Pakistan has suffered the loss of Rs43 billion due to the war on terror. The top leadership of the country was told that cut in perks and privileges of the rich and powerful groups was necessary so that the budget deficit could be reduced. The experts called for levying 70 to 80 percent tax on the rich, if 100 percent tax could not be imposed. The economic mangers said demand of electricity, natural gas, and other resources was increasing due to increase in the population. “Due to lack of this balance, new economic problems could emerge,” they added. Sources said the president and prime minister told the economic managers that such economic policies that could give hope to the masses should be formed.
The sources also said that the meeting was also told that the government needs Rs80 billion extra amount to extend subsidy on electricity, and if the subsidy was not given, the power tariff would have to be raised.
The presentation was attended by Finance Minister Dr Abdul Hafeez Shaikh, Minister of State for Finance and Revenue Ms Hina Rabbani Khar, Senator Waqar Ahmad Khan, Deputy Chairman Planning Commission Dr Nadeem ul Haq, Governor State Bank of Pakistan Shahid Hafiz Kardar, Secretary General to the President Salman Faruqui, Secretary to the President Malik Asif Hayat, PS to PM Khushnood Akhtar Lashari, the federal secretaries finance, revenue division, planning commission and privatisation, Special Secretary Finance Abdul Wajid Rana, acting Secretary EAD Hasan Nawaz Tarar and Presidential spokesperson Farhtullah Babar.