Withdrawal of subsidy will deepen crisis: Salman Shah

LAHORE, June 4: Former finance adviser Dr Salman Shah says withdrawal of subsidy on oil, gas and electricity will further deepen the prevailing economic crisis and open the floodgates to unemployment and inflation. Speaking at a pre-budget seminar at the Muslim League House here on Thursday, he said the country could not achieve self-reliance by depending on foreign financial assistance. It would have to generate domestic resources for the purpose. The small industries could not pay high markup on loans while International Monetary Fund insisted on increase in interest rates. The revenue targets had not been met and there was a nine per cent decrease in manufacturing because the industry could not remain competitive by procuring loans at the rate of 18 to 20 per cent markup.

He said the budgetary allocations should not be based on unrealistic estimates. The government had proposed a revenue target of Rs1,400 billion for a Rs2,900 billion budget. The government hoped to meet the revenue target with the help of foreign financial assistance in view of limited resources. He said the government would have to ensure construction of all major dams, including the Kalabagh dam, to solve the problems of food and energy shortage on a permanent basis. He said Kalabagh dam should be built first of all because it could be completed in five years whereas construction of Bhasha dam would take 13 years. Construction of dams was a technical issue and should be examined from the technical angle instead of being politicised. He said the Pakistan People’s Party had been opposing the Kalabagh dam in the past on political grounds. It should now examine the issue from a nationalist point of view and get the dam built.

Salman Shah said work on all the mega projects launched during the tenure of the previous regime was at a standstill. Hundreds of thousands of daily wagers had lost their jobs as a result. Work on the projects would have to be resumed to provide employment to daily wagers. Pakistan could become the third largest regional economy after India and China through better economic management.

He said development process in Punjab had also suffered and revenue targets had not been achieved. Leader of Opposition in Punjab Assembly Chaudhry Zaheer ud din Khan said the provincial government had failed to start work on the development projects announced by it last year.