00:00 Whenever the budget is announced, the question is how much interest will be in the budget this time.
00:07 And when the interest reaches 10,000 billion rupees, it rings a lot of alarm bells.
00:15 How do we fix this?
00:17 Bismillah, you have raised a very good point.
00:22 What has happened in Pakistan is that the total interest rate has been pushed to the sky by the IMF.
00:33 You may be surprised, you may have an idea that it is at 22% right now.
00:40 This is the highest level in history.
00:43 And the IMF has done this so that there is a shortage in interest and a shortage in commercial losses.
00:52 Certainly, there is a shortage in your commercial losses at the moment, but there are some other reasons for it.
00:58 Now see that at this time you are absolutely right that there is a risk of reaching 10,000 billion in the coming year.
01:08 The debt servicing that is due to the increase in interest rate, which is called debt servicing, is almost 60% of the budget.
01:23 When the federal government gives its revenue to the commercialists, the revenue that is saved by the federal government is not even enough to pay the school fees.
01:50 We go into a deficit, we spend our military, we spend our civil service, pensions, education, health, etc.
02:02 As you said, we do all these things by borrowing in the deficit.
02:11 To what extent has our budget system become completely troubled?
02:20 The amount of expenditure on interest on the goal of the Ramamali year is expected to be more than Rs. 1,060 billion.
02:32 This is not a human resource, this is not a human development, this is not an industrialization, this is not a positive impact of the expenditure on society.
02:45 You have to pay this money, the interest rate is going up, you have to pay this money.
02:49 We are stuck in this debt trap, especially because of interest.
03:02 Is there any way out of this debt trap?
03:14 It is very important to talk to the IMF, the rate of interest has significantly decreased.
03:24 It was like this at one time, it had reached about 40%, and in the last month it has fallen to 17%.
03:32 The rate of interest is 22%, it is so high that no case is present at the moment.
03:43 So when you are negotiating with the IMF, there should be a clear reduction next year.
03:51 One way is that if one percent is less, then you save 350 to 400 billion.
04:00 Think about how big an impact it will have.
04:03 On the other hand, our governments have tried to reduce the revenue ratio with our economy.
04:19 It has fallen significantly.
04:22 So it is very important to increase it.
04:25 But we should not go back to the indirect taxes that are imposed on the people.
04:32 We have a lot of concessions and reliefs from the elite class of the Ashrafiyah.
04:40 It is time to return all of that.
04:45 And we have to make our system broad based.
04:48 And you have to bring progressiveness in it.
04:51 And the revenues that will be generated, some relief will have to be given to the poor class.
04:58 So if relief has to be given to the poor, then we see this ambition at one place.
05:05 That the poor should be brought in peace.
05:07 Maybe it is a verbal ambition or something, I don't know.
05:10 But that thing is translated in the budget, it is not visible.
05:13 Because if that thing is being translated in the budget, then the expenses are being made in places where the poor are impacted.
05:20 Like we are seeing the problem of farmers, wheat problem.
05:24 Now the farmer is threatening the wheat problem next time.
05:28 Or he is saying that we have no benefit, we will not plant the crop next time.
05:34 We will not cultivate the wheat, we will not sow the wheat.
05:38 So in such a situation, there is one policy that is made and shown in the budget.
05:44 And there is one that is being implemented.
05:47 How much gap do you see?
05:50 The thing is that in our budget, for the past few years, some good relief measures have been taken.
06:03 The most important and the best I think, the effort is of the Benazir Income Support Program.
06:12 As a result of this, 9 million women who are in the homes, some money is transferred quarterly every third month.
06:24 Which are increasing and are reaching a suitable level.
06:28 And about 460 billion, God willing, this year we will reach the poor group under this program.
06:38 This is a good program and Pakistan has tried to develop it.
06:43 On the other hand, what you have mentioned, what happened with wheat this year, is a very sad thing.
06:52 Now you think that before the crop and without knowing what will happen,
07:03 you have imported wheat worth 3.2 billion dollars.
07:12 And because the price of this wheat has decreased,
07:17 when you have told your farmers that you have given only 3,900 rupees,
07:26 then giving is a duty.
07:29 In the budget, it is provisional that the subsidy of PASCO is given by some federal and some provincial governments.
07:38 It is very important to give that subsidy.
07:41 And if there is a mistake in that, then it is a justification for our farmers to be very angry about this.
07:51 I would like to know, if you were making a budget, what would be the main pointers that you would focus on?
08:04 Considering that we want to make the economy boom,
08:08 SIFC is in its place, we want to bring foreign direct investment, but our challenges are also mammoth.
08:13 Look, people like us, like you say, professors, sometimes they come to the government,
08:20 our job is to research and give policy advice.
08:23 So what would be my advice at the moment?
08:26 My advice would be to try to reduce expenses significantly,
08:32 reform pensions, it is very important, all the provinces and federal governments should do it together.
08:38 Secondly, the state-owned enterprises that are incurring huge losses,
08:44 some should be privatized, some should be tried to improve their management and governance.
08:50 Your energy sector is a big problem of circular debt, control the losses,
08:58 increase the revenues, but do it in such a way that the Ashrafiya should give,
09:03 and especially your agricultural sector and your property sector,
09:10 you should invest some taxes in it and try to get some revenues from big traders.
09:17 The solutions are clear, the problem is just that will these things happen in a political struggle?
09:27 This is our prayer that Pakistan does not have a margin, we do not have time, we have to do it.
09:37 There is no other way, do or die situation. Thank you Dr Hafiz Pasha for joining me in the program.
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