Past Govt, SBP ruined economy

Pakistan's prominent experts have suggested a multi-pronged strategy, starting with the widening of tax net and lowering public expenditures, to steer the country out of present economic morass and make it more welfare oriented for the poor. Renowned Economist Dr. Shahid Hassan, commenting on prevailing economic situation in the country, said that now the new government needs to take revolutionary decisions to improve the situation.
The policies pursued by Pervez Musharraf government during the last eight years as also by the State Bank of Pakistan have destroyed the Pakistan's economy. When asked for suggestions to steer the country from present financial crisis, Dr. Hassan recommended a number of measures which the government needs to take. He said that a target of Rs 1500 billion should be fixed for the next fiscal year for tax revenues without burdening the common man. This, he said, could be done by doubling the number of income tax payers, by checking tax evasion and withdrawing undue concessions and suggested that the GST should be raised to maximum 5 per cent. Out of the total GST, 4 percent should be allocated in the education sector and three in the health sector.
Corruption is eating into the society and destroying the moral fabrics besides destroying the national economy. There has never been greater need to eliminate or to minimize corruption more today than ever. Even just minimizing the corruption would be a positive contribution in the national economy.
Dr. Shahid Hassan said that unproductive expenditure should be curtailed by 35 percent and the expenses of Prime Minister House, President House, Chief Ministers' House and Governor's House should be reduced by 80 percent.
Talking about banking sector, he said the consumer financing schemes should be banned except for housing; banks should be given targets for microfinance for the poorest of the poor. The agriculture loan should be given for landless haris. Loans should also be given to farmers for the purchase of buffaloes, he underlined.
He recommended that banks must be directed to offer a rate of profit which is above one percent of inflation rate to all saving account holders and the banking spread should not be more than 3 percent.