Measures to Improve Economic Areas Proposed in Advisory Council Meeting

ISLAMABAD: The Economic Advisory Council (EAC) agriculture subgroup has proposed a block allocation of Rs41.25 billion in the budget for 2021-22 for interventions under the Agriculture Transformation Plan to lower agricultural input costs and revive cotton output in order to minimise reliance on imports.

A series of ideas have also been proposed by the council’s information technology subcommittee to encourage IT exports and e-commerce in the country.

During a meeting presided over by Finance Minister Shaukat Tarin on Saturday, the EAC’s several subcommittees discussed policy initiatives. Food Security Minister Fakhr Imam led the panel, which included Industries Minister Khusro Bakhtiar, Jamshed Cheema, Ghufran Memon, Ameer Aziz, Mansuril Arfeen, Salman Shah, Dr Abid Suleri, and others.

According to the paper, Rs4 billion should be set out in the budget for interventions in organic agricultural research and promotion, soybean promotion for edible oil, floriculture for export, and horticulture cluster development.

It also recommended allocating Rs5 billion for grain storage silos, Rs12 billion for fertiliser subsidies, Rs9 billion for the Trading Corporation of Pakistan to acquire 20 percent cotton (a one-time allocation), and another Rs8 billion for warehousing intervention.
Cotton, olive, soybean, and palm, as well as cattle and fisheries genetic enhancement, will be targeted.

Seed sector reforms, the adoption of a digital subsidy scheme, boosting water efficiency, redesigning extension services, post-harvest storage, and reorganisation of research institutes are among the initiatives proposed to close the yield gap.

Mr Bakhtiar emphasised the importance of implementing the Agricultural Transformation Plan, which was developed by the current government following comprehensive consultation with important parties and a thorough examination of available data.

Finance Minister Tarin promised the meeting that the suggested plan would be thoroughly studied, and that key proposals will be included in the next budget.

The IT subcommittee advocated that in the case of startups, taxes be eliminated or reduced for three years, assisting in the expansion of the domestic company market and lowering local unemployment.

Because of the minimum and high advance tax, as well as low margins, small businesses, maybe with limited employees and resources, are currently avoiding entering the formal sector.

The subcommittee also advocated reintroducing and extending the startup advance tax exemption for another five years.

The IT sector, according to the meeting, is one of the fastest-growing in the country, contributing around 1% of GDP ($3.5 billion). Its contribution has doubled in the last four years, and analysts predict that in the following two years, it will increase by another 100 percent, to $7 billion.

In the fiscal year 2017-18, IT exports reached a new high of $1.067 billion, up from $939 million the previous year. According to the State Bank of Pakistan, Pakistani software exports are currently worth $700 million per year (SBP).

However, the country’s freelancers make another $0.5 billion in exports, which the central bank does not account for since they are neither documented or regularised. Pakistan’s freelance industry is rated fourth in the world and is growing at a staggering 47 percent per year, necessitating support and regularisation.

The IT subcommittee advocated a number of policy measures to attract investment, educate human resources, and generate export surpluses in the sector. The IT subgroup addressed their ideas for examining the sector’s potential and creating an environment conducive to generating exportable surplus.

The finance minister tasked the group with formulating proposals that could facilitate local trade, enhance financial inclusion, pave the way for forming partnerships with International IT experts and develop skills of the untrained youth. He also affirmed his support for the sector by making appropriate policy changes.

The China-Pakistan Economic Corridor (CPEC) subgroup, chaired by CPEC Authority chairman retired Gen Asim Saleem Baja, told the gathering that the project’s promises were being met.

Mr Bajwa spoke about the prospect of structuring investments in various special economic zones in partnership with regional development partners, using short, medium, and long-term strategies.

Sania Nishtar, who chairs the subcommittee on social security, updated the meeting on the Ehsaas Program’s planned intervention plan for next year and provided budgetary allocation proposals.

Mr Tarin complimented Ms Nishtar for developing a comprehensive programme for social protection and poverty alleviation in the country, and he commended the suggestions.

Mr Tarin told the meeting that the EAC’s goal was to develop concrete short-, medium-, and long-term growth and transformation strategies for all sectors of the economy. Different subgroups were formed to make concrete recommendations after consulting with stakeholders.
Federal Minister for Economic Affairs Division Omar Ayub Khan, Adviser to the Prime Minister on Commerce Abdul Razak Dawood, Adviser to the Prime Minister on Institutional Reforms and Austerity Dr Ishrat Hussain, and Governor of the Central Bank of Pakistan were among those who attended the meeting.

Source: Dawn