KARACHI - The federal budget for 2017-18 is devoid of any proposals to overcome the serious risks and challenges being confronted by the economy. The reason is that the measures required by the ailing economy would hurt the interests of the rich and the powerful, said economist Dr Shahid Hassan Siddiqui while commenting on the budget here on Saturday.

He said that in the Vision 2025 approved by the incumbent government it was committed that the GDP growth rate for FY 2017-18 would be 8% and exports would be US$35 billion this year. In the budget speech the DGP growth rate target for FY2017-18 has been lowered to 6% whereas the exports are likely to remain in the range of US$25 billion. This has made the Vision 2025 meaningless right in the beginning, he remarked.

Dr Hassan said the proposed Tax-GDP rati  o for FY2017-18 is as low as 13.2%. This is even below the Tax-GDP ratio of 15.6% achieved 22 years ago in 1995-96.

The Tax-GDP ratio, National Savings-GDP ratio and combined expenditure on education and health as percentage of GDP are not only lower than the average ratio in the region, but also one of the lowest in the world, he added.

He said the finance minister has proudly claimed that due to the policies of the present government the per capita income of Pakistan will grow rapidly in the coming year.

The actual position, however, is that according to a report of the Price Waterhouse Coopers (PWSC) referred to by the finance minister, Pakistan’s present ranking with regards to per capita income is 148 out of 189 countries, meaning that 147 countries have higher per capita income than Pakistan.

The PWSC report further says that by 2020 Pakistan’s ranking would be lowered to 151 from the present 148. It observes that although per capita income of Bangladesh is presently lower than Pakistan but by 2020 the per capita income of Bangladesh will be higher than Pakistan.

The report states that Pakistan’s ranking in the world in respect of GDP (nominal) is presently 41 but by 2020 there would be no significant improvement in this ranking. This means that the projected improvement in the GDP growth rate due to enhancement of energy production is not visible in coming years, Dr Shahid remarked.

He said the fact of the matter is that the World Bank Commission had observed in 2008 that even if economy of Pakistan grows at an average rate of 8.3%, Pakistan will not be able to reach the income level of OECD countries before 2025. This is a serious situation as Pakistan’s average growth rate in the coming years will be only 6%, he stated.

He said the finance minister had claimed that by 2023 every child would be going to school. This is not possible as presently about 26 million children are out of schools and sufficient funds are not being allocated by all four provinces in the education sector.

In 2009, it was committed by the federal government and all the provinces that starting from 2015, Pakistan would be spending 7% of GDP on education. The provinces are now not ready to allocate this much amount even in coming years and in FY 2017 only about 2.3% of GDP was spent on education, Dr Hassan said.

It is therefore apprehended that even by 2060 every child will not be going to school in Pakistan, Dr Siddiqui said. He said the sad part was that even the Pakistan Tehreek-e-Insaf (PTI) was not prepared to implement its election manifesto in KP and is therefore not fulfilling the commitment for allocating required funds for the education sector.

He said the PTI manifesto also said that provincial governments must play their due role and follow the principle that state should take over under-declared property. It was therefore incumbent for the KP government to enhance the DC rate of properties so that these rates are equal to market value of the properties. It is, however, unfortunate that even the KP government is not prepared to enhance the DC rates of properties that are shamelessly low in all four provinces and in Islamabad.

All the four provinces have therefore practically supported the federal government in announcing the tax amnesty for properties, which provide safe havens to looted money.

This amnesty scheme, which is for the benefit of tax evaders and other corrupt mafias, has been continued in the next fiscal year also, he observed.

The blame game is going on in the country in respect of Panama case but unfortunately none of the political parties, lawyers’ organisations and even other professionals are prepared even to demand recovery of the looted money held in Pakistan under “Domestic Panama”, he added.

Even if the Supreme Court takes a suo motu notice and issues directives in this regards, about Rs2,000 billion (two thousand billion) could be additionally mobilised in next few months which could be channelised for betterment of poor Pakistanis.