ISLAMABAD: Finance Minister Miftah Ismail said on Saturday that Pakistan has no choice except to take tough decisions in order to steer out of the financial crisis, forewarning that the country might follow the path of Sri Lanka if such ‘tough’ decisions are not taken.

“We cannot give expensive gas to our people if it’s expensive in India, Sri Lanka and Bangladesh,” he said while addressing a post-budget press conference in Islamabad. He was accompanied by State Minister for Finance and Revenue Ayesha Ghous Pasha, Information Minister Marriyum Aurangzeb and the FBR chairman.

At the start of his press conference, the finance czar described the prevailing situation as the most difficult in the past 30 years of the country’s history and said the government cannot afford such expenses that it cannot afford. “We will take tough decisions if we have to.”

The federal government on Friday presented the annual budget with an outlay of Rs9.5 trillion. Among many proposals, it has proposed advanced tax on vehicles over 1600 cc.

To a query about the difference in budget, he said: “We will not lie to you and the stated budget is there in the document.”

Salient features

• Budget deficit stands at Rs4,598 billion
• Government gives Rs20 billion subsidy package on palm oil
• Income tax and sales tax to be merged into fixed tax
• 2.5 million shopkeepers to be brought under the tax net
• More than Rs1,100 billion subsidy given to the Power Division
• Rs500 billion given in form of circular debt
• IMF not happy with Pakistan
• No tax on erstwhile FATA
• First target is to not follow Sri Lanka path
• Second target is to provide relief to the people
• Task force will be formed to counter tax theft
• Only Rs1,000 billion will be left after paying loans
• Three per cent increase in total expense of government
• Electricity is being produced at Rs35 per unit
• Circular debt of gas stands at Rs1,400 billion
• $20 million worth of gas is wasted (unaccounted for gas)

The finance minister lamented the “state of mismanagement” while stressing the need for improving it administratively and the economy.

“We are not even using five per cent of the resources available in the country,” Miftah said.

State Minister for Finance and Revenue Ayesha Ghous Pasha struck a similar tone saying that the purpose of such tough decisions is to put Pakistan back on the path of development. “The philosophy of the budget is that the impact of the difficult decisions is less on the people,” she said while expressing the government’s intention not to buy loans.

Nothing could be done under the IMF programme, she said, adding that the government has done what it could.

To a query, the finance minister hinted at privatising one or two companies and the government was mulling such an option. He explained that they were gas and distribution companies.

“If you want to take your cases back come to the Alternate Dispute Resolution Council (ADRC), we will resolve them in a few months,” he said while responding to bankers, whose cases are pending in courts.

To another query over Rs2,400 billion budget of the army and more than Rs10,000 billion of outlay, he said that every paisa was accounted for in the budget and Rs100 billion “was still saved” after the budget.