LAHORE/KARACHI/ISLAMABAD/RAWALPINDI - The federal budget for 2018-19 Friday evoked mixed reaction from businessmen, industrialists and economists and majority of them considered it a populist budget with a series of relief measures which might be amended by the next elected government.

The finance minister also stated in his budget speech that despite few months remaining, the government has presented full-year budget to ensure continuity of business activities in the country. The minister stated that the newly elected government would have all the ability to make changes in it.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) termed the federal budget for the year 2018-19 as business and the people friendly budget. However, FPCCI leadership announced that a press conference would be held at the Federation House on Saturday (today) at 4:15pm to give detailed feedback of the business community on the budget. “As the first impression, it seems friendly budget. However, after going through the details of the budget and discussion, we shall be able to give business community's reaction,” FPCCI president Ghazanffar Bilour said.

Karachi Chamber of Commerce and Industry (KCCI)'s leadership also welcomed the federal budget 2018-19. “Overall, this budget is better,” said chairman of Businessmen Group in the KCCI Siraj Qasim Teli and president of KCCI Muffasar Atta Malik at a press conference after listening to the budget speech at the Karachi Chamber. Other senior business leaders participating in the press conference were KCCI's former presidents Haroon Farooqui, M Zubair Motiwala, M Haroon Agar, Anjum Nisar and A.Q.Khalil.

They all appreciated the withdrawal of discretionary powers given to Federal Board of Revenue's Chief Commissioner and Commissioners which, what they claimed, was an old and major demand of the Karachi Chamber.

They also welcomed the decision of conducting only one consolidated audit of a company and that would be done after three years' gap, if needed.

These decisions would send a good message to the business community which, otherwise, was embarrassed because of the FBR tax collecting officers' discretionary powers and frequent audits, they added. They said the tax concessions to textile sector would help develop this leading export industry of the country. The KCCI leadership noted it positively that the government had raised the limit of non-taxable income of salaried class up to Rs 1.2 million from Rs 0.6 million per year. However, they showed their apprehensions about the budget implementation if new government comes up with different economic and social priorities.

While addressing a press conference after Federal Budget Speech 2018-19, LCCI president Malik Tahir Javaid said that some good announcements including limit enhancement for income tax exemption, removal of regulatory duty on important raw materials, increase in development budget, allocations for agriculture & livestock sectors and increase in pensions etc have been made in the budget while there are also some questionable lacunas that must be tackled by the National Assembly.

“Unfortunately Kalabagh Dam is not part of the federal budget 2018-19 which means country would not have a new big reservoir in near future and all sectors whether it is agriculture or manufacturing sector would be suffering due to water scarcity and cheap electricity”, the LCCI president added.

The UBG chairman and FPCCI former president Iftikhar Malik said the government has set a highly ambitious GDP growth target of 6.2 percent for FY19, expecting GDP to grow by 4.9 percent during the year. However, he added that the budget is best in prevailing circumstances, as the government has maintained zero rating status of export sector, whereas it has also proposed an improved mechanism to clear outstanding and new rebates. He said that refund claims currently pending will be cleared in a phased manner over the next 12 months starting 1st July 2018 which is also positive step. He said that Long Term Financing Facility (LTTF) and Export Refinance Facility (EFS) at lower rates will too continue for textile sector which is appreciable.

Iftikhar Malik said that increase in allocations for water and power projects would help get rid of energy crisis. Funds for infrastructure development would also attract foreign investment. He said that increase in defence budget was need of the hour as country is facing security challenges. He also welcomed announcement for refunds, agriculture support fund and composite audit. All Pakistan Textile Mills Association former chairman Gohar Ejaz termed the budget as disappointing for textile industry, complaining that the government has taken no solid measure for industrialization, as PM export package has not been extended.

He said that government knows that exports are constantly falling but announcement was made to control decline. He said that government has already failed to improve growth rate of textile sector under the European Union’s GSP Plus status because of lack of planning. He said that no proper marketing plan was prepared to get the benefit of GSP Plus. Abdul Basit, chairman of the Punjab Industrial Estates Development and Management Company (PIEDMC) and former LCCI president, called for several amendments in the budget by the National Assembly where budget document will be presented for debate and approval.

Expressing disappointment over non-allocation of funds for KBD, he urged the government to start work on Kalabagh Dam to get rid of the menace of water scarcity.

Moreover, he said that Pakistan’s food sector should be given zero-rated facility to get due share in the international food trade and budget remains quiet in this regard, he added.

He said that promotion of halal products should be our budget’s major agenda, as it could give a quantum jump to the declining exports. There is no Muslim country in the list of top-10 halal meat exporters, although Pakistan has a big potential of exporting halal meat globally.

Noted economist Dr Ashfaq Hassan Khan flayed the federal budget for the financial year 2018-19, terming it only the manipulation of numbers and said that this budget is neither people friendly nor businessman friendly. He said the budget is a political statement of a political government without much visionary reflection of where Pakistan should be heading. “The PML-N has made this budget for election slogans and this is pre-election rigging.”

Noted financial expert Sohail Ahmed said that though measures announced by the ruling government seem positive for the stock market but these measures could potentially be revisited by new government after the general election. Moreover, he expected Pakistan to get into another IMF programme in 2H2018, which is usually followed by shrinkage in fiscal balance.

PAAPAM former chairman Nabeel Hashmi said that basically the PML-N government had probably no option this year but to give industry supportive budget. “Over the last five budgets, they did nothing but hit the manufacturing and honest taxpayers. Honestly I believe the government has played a gamble here on the real estate sector. If the gamble plays well there should be no problem since the real estate sector does have the potential to contribute significantly to the national exchequer if taxed properly.”

Trade bodies of Rawalpindi including Rawalpindi Chamber of Commerce and Industry (RCCI) declared federal budget 2018-19 as ‘business-friendly.  Addressing a press conference, President RCCI Zahid Latif Khan said despite economic crunch and a number of domestic and international challenges on different fronts, the government has announced a business and people-friendly budget.

Meanwhile, Islamabad Chamber of Commerce and Industry President Amir Waheed Friday also welcomed the sixth budget announced by the present government, providing relief to livestock, dairy and agriculture sectors.

Reducing custom duty on dairy, livestock and seeds would help increase production, he said while talking to a news channel. For the promotion of agriculture sector, handsome relief was given to the farmers to achieve the objectives, he said.

In the present circumstances, it may be called the people-friendly and balanced budget, he said. Besides corporate sector, different other companies would also avail the relief as given in the budget, he added.

Commenting on the budget, former finance minister Dr Salman Shah said reducing taxes would help the business community to boost economic activities in the country.