It would not be ironical to say that the government officials promise at the start of the tenure when they feel like they would unable to win the election otherwise, they make plenty of promises however when it comes to fulfill them they give various reasons for the failure and they blames the others for their inability to fulfill promises. Same is with the current government which has announced a downward revision of the growth rate.
With the starting of the second quarter of the fiscal year 2013-2014, the official has announced the downward revision of the growth rate. When the budget was announced for the current fiscal year the target growth rate of GDP was 4.4% however, this has now been revised and it would be less than that. The GDP growth for the fiscal year remained almost 3.5%, on the basis of it, the target was set at 4.4% however they have decided a downward revision, and given the current situation and the instability I am sure that in the third and fourth quarter the growth rate would again be downward revised.
The growth rate is necessary to be increased in order to curb the unemployment and to cater the flooded youth coming out of the institutions at a large scale. There is an increasing trend in unemployment rate. Currently its figure is 6% , moreover in order to curb this figure the country needs to perform in growth rate.
It has been noticed that despite the global financial crisis the growth rate in the neighboring countries remain 5-7%, however in Pakistan it is 2-3%, this is again due to the law and the order issues which are to me the grass root level evils for the bad performance of the economy.
Many of the reasons have been mentioned, they claim various grass root level causes for the failure to achieve the target. Most important is the power crisis which is being faced for many years, it has been claimed that the power shortage has caused 2% downfall in GDP annually. Moreover the corruption and the social unrest contribute equally to this cause.
What so ever I have noticed so far is that my leaders are excellent orator in expressing what the problems are however they are less concern with suggesting solutions and finding the reliable and timely solutions to this? The power crisis which they keep on mentioning can be overcome if they complete the pending projects for the last many years. The Diamer-Basha dam only has a capacity of 16000-17000 MW. Along with this many of the other issues can also be resolved provided the sincere efforts leaders. So that a day will come when the government will have a upward revision of the growth.
Planning Commission aims to make plans for the economic prosperity of the country. Recently Chief Minister called All Parties conference, which is aimed to formulate the long term and medium term plans so that will enable the economy on a fast track growth trajectory.
The Planning Commission’s plans needs disbursements from the Ministry of Finance for their implementation. However these disbursements have not been received in the past except for some specific projects on the grounds that funds in the treasury are insufficient to meet the plan targets. Ministry of Finance has the logic behind its decisions to blame the poor performance of the PPP-led coalition government for the last five years. Thus whichever the plans made by the Planning Commission may or may not be supported by the Ministry of Finance, which is in fact the waste of time. To me this seems the waste of resources, because Planning Commission makes plans from time to time in order to expedite economic growth.
In Pakistan it is a common practice that government of the time always blame the last governments for the poor economic performance, and it is the same thing with current government. Pakistan is currently facing a higher fiscal deficit, high inflation, and a higher unemployment. Moreover it is also facing a large volume of debt which is rolling over persistently due to which there is a borrowing constraint. There remain no other option to finance its expenditure; however the financing of the expenditures through the seinorage (printing of money) will also create stagflation in the country which already prevails in the economy.
The economy is stuck at a stage where there seems no expectation of the rival; the government should call upon some of the notable economists to get out of this dilemma who would suggest some realistic approaches for the implementation of the plans made by Planning Commission so as to curb the wastage of resources and for the economic prosperity of our homeland in particular.
The country is passing through a high unemployment and a high inflation with a low economic growth, which is called stagflation. Along with this, it is also facing a severe balance of payment deficit. There is a low tax to GDP ratio as well which is also not feasible for the economic growth.
In order to take over the issues the policy makers have chose expansion monetary policy. However this has created a high inflation which as a result has depleted the foreign exchange reserves. More over the nominal exchange rate has been depreciated, thus the domestic saving have been decreased curbing the economic growth.
Control on the inflation is a growth forwarding element of macroeconomic framework.
One of the ways to get out of current low economic growth is through borrowing. The scope of foreign borrowing is also less due to the huge borrowing before. The other possible option which can be availed by the policy makers is to increase the domestic savings. Domestic saving, also called national saving is the sum of private as well as public savings. In case of Pakistan public is always a dissaver. The only way is to enhance private savings. It would not be bad to mention over that the private saving is also low due to the reason that government has pre-empted in order to finance their current expenditure. With such a situation, where the private investment is depressed economic growth cannot be accelerated and thus domestic saving must be increased.
In order to enhance the domestic saving there needs to be tax reforms. Government should eliminate dis-savings by augmenting tax and non tax revenues. There is an utmost requirement to expend the tax basis and follow sound principles. For that reason all income must be taxed irrespective of the source. If tax reforms are not implemented the public expenditures can only be financed through forced saving through printing of currency, which as a result fuel inflation and increase vulnerability of balance of payment.
However the economic growth cannot be accelerated on sustainable basis without controlling inflation. Control on the inflation is a growth forwarding element of macroeconomic framework.
thou my son,
prayers across the air,
for the happiness
shine in your eyes
for the safety
conquer the world
touch the skies
fly in the air
you the sole
don’t go away
even if you
be back soon
don’t make me wait
will keep an eye
at the door
and will wait
will beg the Soul
the Take Carer,
to give u real happiness
in your veins
the noble soul!
I really love you!
** words of a mother to his son, who is her only support in this world.