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Main Focus. Economy of Pakistan Federal Budget: 2012-2013 Economic Challenges: 2013 Fiscal Policy Suggested Charter of Economy. ECONOMY OF PAKISTAN: 2012-13. Presentation by. Prof. Dr. Khawaja Amjad Saeed.

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economy of pakistan 2012 13

Main Focus

  • Economy of Pakistan
  • Federal Budget: 2012-2013
  • Economic Challenges: 2013
  • Fiscal Policy
  • Suggested Charter of Economy

ECONOMY OF PAKISTAN: 2012-13

Presentation by

Prof. Dr. Khawaja Amjad Saeed

Founder Principal, Hailey College of Banking & Finance, University of the Punjab, Lahore Pakistan (2003----), Member Governing Council, International Federation of Accountants (IFAC), New York (1997-2000), President, South Asian Federation of Accountants (SAFA) (1997), President, Institute of Cost and Management Accountants of Pakistan (1997-2000), President, Association of Management Development Institutions of South Asia (AMDISA) (1993-96), Pro Vice-Chancellor University of the Punjab, Lahore (1994-1996), Founder Director, Institute of Business Administration (IBA), University of the Punjab, Lahore (1973-1996) & Senior Faculty Member of Hailey College of Commerce, University of the Punjab, Lahore (1965-73). Earlier he served in Corporate Sector in Pakistan for eight years (1958-65).

slide2

WELCOME TO OUR PROGRAM

  • PRESENTATION FRAME
  • Economy of Pakistan
  • Constitution of Pakistan 1973: Economic Matters
  • Federal Budget: 2012-13
  • Pakistan: Economic Challenges: 2013
  • Economic Management Matrix
  • Fiscal Policy
  • Suggested Charter of Economy
slide6

1-3: SERVICES

Components

slide11

3-2: Federal Annual Development Plan 2012-2013

*Earthquake Rehabilitation & Reconstruction Authority

slide15

4: PAKISTAN: ECONOMIC CHALLENGES: 2013

  • A: Economy Challenges 2012
    • Business Environment: Deteriorating
    • Foreign Investment: Declining
    • Exchange Rate: Depreciating
    • Inflationary Pressure: Building Up
    • Foreign Exchange Reserves: Depleting
    • Industrialists relocating their Industries Abroad
    • Electricity and Gas Shortages: Aggravating
    • Relations with International Financial Institutions Including IMF: Deteriorating
    • Exports Growth: Turning Negative
    • Mysterious Growth in Remittances: Continuing
    • Economy Remaining the off radar Screen of the Government
slide16

4: PAKISTAN: ECONOMIC CHALLENGES: 2013

  • B: Measures with Question Mark
  • 7th NFC Award
    • 1. New NFC Award diverted bulk of Federal Government Resources to Provinces at a time when they were needed more:
      • To Finance Growing Interest Payment
      • Security Related Expenditure
      • Bailing out of PEs with losses
      • Paying WAPDA/PEPCO to Finance their Inefficiencies
    • Tax System:
    • Failure to Reform Taxation System and Broadening Tax Base to Generate more Tax Revenues.
slide17

4: PAKISTAN: ECONOMIC CHALLENGES: 2012

  • B: Measures with Question Mark
    • 3. Petroleum Products
      • These are doubly taxed:
      • Exchange rate depreciation has increased the landed cost of oil.
      • Petroleum Development Levy (PDL) is levied on Inflated basis to mobilize more resources.
slide18

4: PAKISTAN: ECONOMIC CHALLENGES 2013

  • C: 2013 Outlook
    • Outlook for 2013 is Likely to Further Deteriorate.
    • Political uncertainty with adverse consequences on the economy.
    • Fiscal indiscipline hallmark of the Government during election year.
    • Mobilization through taxation will take the back seat.
    • Reliance on Non-Tax Revenues would increase further.
    • Expenditure is expected to rise further with budget deficit likely to be in the range of 6% 6.5% of GDP.
    • Economy will remain out of focus of the political leadership.
    • Energy shortage (electricity and gas) to aggravate further.
    • Politics is likely to dominate economics.
slide19

4: PAKISTAN: ECONOMIC CHALLENGES: 2013

  • D: Expected Trends 2013
    • 1. GDP Trend : 3-4%
    • 2. Domestic Investment : Not expected to Pick up
    • 3. Unemployment and Poverty are likely to rise further
    • 4. Inflationary pressure to rise on account of senseless increase in government administered prices
    • 5. External balance of payments to come under pressure due to following:
    • a. Flat, even negative export growth
    • b. Search in payment to the IMF
    • c. FDI to witness a sharp decline
    • d Sharp depreciation of exchange rate
    • e. Public debt is likely to worsen on account of large fiscal deficit.
slide20

4: PAKISTAN: ECONOMIC CHALLENGES: 2013

  • E: Consequences
    • National Security at Stake
    • Miss-Governance to Continue
    • In Search of a Direction
slide22

6: FISCAL POLICY

  • Objectives
    • Full Employment
    • Resource Mobilization
    • Resource Allocation
    • Maintenance of Economic Stability
    • Income Re-Distribution
  • Canons of Taxation: Adam Smith
    • Equity
    • Certainty
    • Convenience
    • Economy
  • Other Canons
    • Flexibility
    • Situation
slide23

6: FISCAL POLICY

  • 4. Income Tax Rates 2013
    • Individuals
      • - Non-Salaried - 5 brackets (10% -----25%)
      • - Salaried – 5 brackets (5.0% -----20%)
      • - Exempt upto Rs. 4 Lac
    • Companies
    • - Public, Private& Banking Companies 35%
    • - Small companies 25%
    • 3. Dividend received by all tax payers 10% and 20% on banking company from its assets management company
    • 4. Property income
    • - Rs. 150,000 exempt
    • - Rates 5% -----10%
    • 5. Capital gains
      • With holding period less than six months 10%
      • More than six month but less than 12 months 8%
slide24

7: SUGGESTED CHARTER OF ECONOMY

  • Domestic Resource Mobilization
  • Income Tax by All
  • Self Reliance for Financing
  • ADP Financing
  • Provincial Govt Budgets
  • Public Enterprises Losses
  • Good Governance & Corporate Governance
  • Inflationary Impact: Salary increase
  • CBA----PSA
  • NPLs
  • Professionals Role
  • Holistic approach to Economic Development with equitable distribution of wealth and income across the board

THANK YOU FOR

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