More changes will be coming in the few weeks, Finance Minister Asad Umar told the media on Thursday. But a lot of the measures the government is taking are medium-term measures that won’t yield results right away.
A day after he presented the mini-budget in the National Assembly, the minister said the measures the government is taking are to remedy the recurring issues facing the country.
The world is progressing and leaving us behind in the sectors of education, health and economy, he said, adding that there are very few countries worse off than us.
There are three major issues we haven’t been able resolve, Umar said. First is that our expenses are greater than our revenue, second is that our exports are lower than our imports (and the difference is increasing) and third is low investment rates.
We need around 25 to 30% investment but only have 14 to 16%, he explained. Long-term progress is not possible without investment, he said.
He told the media to test the government’s policies against their problem resolution. We need these measures for our future, he said, adding that for job creation, wealth creation and foreign debt servicing you need these long-term measures.
We’re in survival mode, he said, explaining that the policies they have made have been created on the advice of the economic advisory council.
The implementation of this advice is in the economic reforms package presented yesterday, said Umar. However, the country still has a long way to go, he cautioned. He said he wants the agricultural and industrial sectors to stand on their own.
We are taking measures is to increase investment, he said. We want a stronger agricultural sector, and lower interest rates at banks, added Umar.
We will continue working on this, he said, adding that lots of work still needed.
He said the measures they are implementing are medium-term and are revenue neutral.
The finance minister also denied that the government has levied Rs12 billion in new taxes, as reported by an Urdu language newspaper. Only car tax has been increased, he clarified.
When someone is sick and dying of a heart attack, you don’t take them to the gym, you take them to the ICU for surgery, he said. The first phase of our economic plan was our surgery, explained Umar. Now we’re in the second phase, he said.
The finance minister said the government is now working to control the trade deficit by increasing the domestic capacity. If we increase our domestic capacity, we won’t need to import, he explained.
Wednesday’s mini-budget was all about domestic supply expansion, he said. It won’t increase our revenue in five months nor will it make a big difference right now but these changes will help in the long term, he said.