Withholding tax on pay phones, duty on scrap dropped

ISLAMABAD (June 15 2005): The government on Tuesday withdrew 10 percent withholding tax on pay phones and 5 percent duty on scrap to boost ship-breaking industry.

Winding up discussion on the 2005-06 budget, State Minister Omar Ayub informed the National Assembly that economic wellbeing, defence, national cohesion and diplomacy were the priority areas to take the country forward. Prime Minister Shaukat Aziz, amid Treasury desk-thumping, said that the 'begging bowl' had been smashed and IMF had packed up on one-way ticket from Pakistan.

The budget, he said, was broad-based, poor and trader-friendly, and would take the national economy forward. “We left little room for the opposition's criticism by showing improvement,” he remarked.

He said that for development and prosperity, the government would continue borrowing from donor agencies under the newly-passed law of fiscal responsibility.

Shaukat spelt out the challenges the country was still confronted with speedy implementation of policies, unemployment, law and order and improvement in legal processes.

About legal reforms package, he expressed the hope that this would bring improvement in the system, and underscored the need for further improvement in police department.

The government policies, he said, were transparent, aimed at furthering the national agenda, and not personal interests, and added that the government did not believe in victimisation.

On this, Pakistan Muslim League (N) member Khwaja Asif tried to draw his attention to the vacant seat of MNA Javed Hashmi. But the Prime minister ignored it.

He avoided touching upon the yet-to-be-finalised National Finance Commission (NFC) formula, being one of the focal points of opposition's criticism against the government.

The Prime Minister invited the opposition to give proposals on how to better the nation, and shun criticism for the sake of criticism.

He fell short of giving any assurance on how to check soaring prices of daily-use items while portraying a healthy picture of the economy with GDP growth at 8.4 percent.

Like Omar Ayub and Adviser Salman Shah, the Prime Minister, too, referred to higher diesel and petrol prices in India, but was silent on availability of daily-use items at rates cheaper than India, including agriculture inputs.

He said that Utility Stores Corporation was selling sugar at Rs 23 per kg and would be providing flour to consumers at Rs 11.50 per kg from next week.

He brushed aside opposition's contention that the improved economic scenario was due to 9/11 events, saying that it was the result of six years' economic policies' continuity.

Defending the increase in defence budget, he said that with weak defence, economy could not improve, and added that defence, good governance, diplomacy, economic progress, political stability and security were key priority areas of his government.

“We believe in peace with strength, as with weakness, one can't achieve the objectives,” he said.

He rejected opposition's point of view that there were no checks and balances on defence spending, and said that an effective system of checks and balances was in place within the ranks of the military.

Referring to 'unprecedented' Rs 306 billion for the Public Sector Development Programme in the budget, he said that increased funds had been earmarked in each area for the masses' betterment.

In this connection, he said that by the end of 2007, all villages across the country would get power supply and this year, 0.25 million villages would be provided gas.

The government was working on a programme worth Rs 2.5 billion to fight out the menace of hepatitis. Likewise, water treatment pilot project would be started in each union council by 2007, he said.

A crash programme, he said, would be launched to provide basic skill and vocational training to the people so that each skilled and trained person could get a job.

Calling agriculture the backbone of the economy, he said that, besides the import of 10,000 tractors, water-courses lining would be made and infrastructure improved in addition to importing duty-free bulldozers.

In the budget, he said, a historic relief had been given to widows and orphans in loans, and pensions were enhanced. He added that government employees have also been given 23-29 percent pay increase.

He defended Pakistan Telecommunication Company's proposed privatisation, saying that it was an era of deregulation, “and you can't survive in isolation”. “PTCL sell-off will increase its profits and generate more jobs,” he added.

Premier Aziz said the economic progress was based on facts and figures and nothing was fudged. He challenged the opposition to prove these incorrect.

He said that when President Pervez Musharraf took over, the country was on the brink of being declared bankrupt, and no agency was ready to give loans to Pakistan. “But today, with constant hard work, GDP growth put Pakistan among top five economies in Asia,” he said. He added a question that should strike the mind of all and sundry that why it was not done earlier.

Omar Ayub said the budget was completely sovereign, with no dictation from outside. “The budget has a message for the world that the march of progress can't be stopped and our economy can leave behind the rest of Asian nations,” he said.

He did not agree with opposition's viewpoint that without NFC award, budget could not be presented, saying that there was no constitutional bar in this connection.

The minister said the NFC award was a sensitive matter and would be shortly announced with consensus among the federating units.

He made a mention of the relief given to government employees, widows and orphans in the budget, besides other sectors of the society. The state minister said that out of 20 proposals sent from the Senate, 17 had been accepted and would be thoroughly deliberated upon for incorporation in the budget.

The opposition members had called for proper checks and balances in defence spending and some even proposed that allocations in this direction should be cut and more funds be allocated for health, education and other social sectors.

The opposition members said that military's role in national politics should be done away with, once for all. They called the budget elite-friendly, saying that there was hardly anything for the majority of the people, who are from lower middle and the poor class.

The budget will now be approved on Friday and National Assembly's session would be prorogued on Saturday. Earlier, the schedule for budget's approval was set for June 21.

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