MQM LEADER MR. ALTAF HUSSAIN'S COMMENTS ON FEDERAL BUDGET, 1998

London - 13 June 1998

Mr. Hussain while commenting on the Federal Budget said that in this time and moment when the entire nation is passing through a time of test and endurance it was a difficult task for the Government to present a budget for the year 98-99. Although it was an achievement of the Government, however, Mr. Hussain emphasised that at this crucial moment the budget should have been a complete reflection of a sincere attempt towards the stability of the country and it should have a manifest coherence with the need of the time. He firmly asserted that the nation and the country cannot afford to repeat any past mistakes.

Mr. Hussain while commenting on the specific measures said that as a result of the recent fiscal measures four different exchange rates have become operational in the country and the exporters will be allowed the lowest of these rates. It was therefore, he said, doubtful if the increased target of exports at 15% would be achievable. In fact, Mr. Hussain emphasised, that some definite export incentives should have been given for increase in the export surpluses and/or export of the value added goods.

Mr. Hussain, while commenting on the imposition of "emergency" in the country said that the credibility of the Government had been badly eroded as a result of the freezing of Foreign Exchange Accounts. He added that it would serve as a great disincentive for promotion of national savings which was already at a low rate.

Mr. Hussain criticised the absolute lack of any measures for promotion of investment in large and medium scale industries. He further added that improvement in large scale manufacturing at 7% over the previous year is hardly reflected on the ground, as there was a negative growth rate last year.

Mr. Hussain further expressed his dissatisfaction over the measures envisaged for the revenue generation. He said that the emphasis on increased revenue generation was once again on the urban sector. He added that at the moment when the entire nation was passing through a crucial time it was expected that new sources of revenues would be explored and introduced such as income tax on agriculture sector. He emphasised that in view of the adverse affects of the sanctions, agriculture tax had become a dire need of time. But, surprisingly this sector had been once again let off from making due contribution to the national revenues. On the contrary, fresh benefits had been allowed to that sector by way of increased loan to the tune of rupees 10 billion. Moreover, he added that big zamindars (feudal) would have the facility to get cheaper tractors and agriculture machinery.

Mr. Hussain further added that there was hardly any justification to reduce duties on luxury items, surprisingly on luxury cars. Reducing import duty on such items would promote their consumption within the country through increased imports and thereby further damage our domestic industry.