10 Reasons Why You Should Attend PTI Protest against Price Hike 22nd December 2013
“If you don’t know where you are going every road will take you there” Chinese Proverb
Gone are the days when there was no planning prior to coming into power. In almost all the developed countries even India (Developing) political parties get votes on their manifestos on how to deal with key issues. May 11th 2013 gave an opportunity to PMLN to form Federal Government.
Hence it is for the 3rd time Nawaz Sharif would become Prime Minister of Pakistan with his experienced team ready to steer the ship out of what former government had left them in. A lot of good things were expected in the economic area. Ishaq Dar as Finance Minister meant a guy acceptable to IMF as the former FM’s needs their ‘nod’ as per past practices.
Past 6 months of PMLN performance in economy give only one indicator, that they haven’t learned anything from the past.
1. Inflationary Impact & Indirect Taxation:-
o Consumer Price Index (CPI) Inflation has gone to 10.9% in November 2013 as compared to 9.1% in Oct 13 & 6.9% in same period for year 2012 when govt came in power it was around 5% almost doubling the Inflations. The purchasing power of people has decreased viciously. In current budget GST has been added from 16% to 19% thus adding indirect taxes on almost every product.
2. Exchange Rate Instability & Foreign Exchange Reserves:-
o Dollar $ has gone escalating to 110 Rs from 98 Rs. Investors’ confidence has shattered badly with the government’s lame attempts to curb the Exchange Rate Stability. This means 6 months back a product which costs Rs 98 will now be for Rs 110.
o Foreign Exchange Reserves have fallen to 12 year low by $2.9BN. Record breaking downward spiral for economy.
3. Unemployment:-
o Gas Load Shedding in winter season means at least 5 Million laborers have to sit at homes for another 3 months till end of this winter season.
4. Total & Foreign Debts:-
o Debts have added by Stooping 1 Trillion (1000 Billion) Rupees in just 3 Months putting additional pressure on Exchequer. Pakistan’s Debt to GDP ratio is Greater than 55%.
Mean Rs 55 out of 100 are paid in debts.
o Foreign Debts have increased by Rs 403 Billion due to Currency Devaluation Taking total debts to Rs 15 Trillion. In an Economy where more than 55% of our budget goes down as Debt Repayment the currency devaluation worsens the picture adding 70Bn with each Rupee Rise in the price of Dollar vs. Rupee.
5. Ridiculing Investors:-
o While Mr. Dar adds to the agony of businessmen & banks seeking $ for foreign trade payments, tipping the traders to sell of their dollars. It’s like ridiculing those who have invested in country with ever rising cost of production thanks to electricity prices being doubled in 6 months.
6. Tax Loopholes:-
o The directionless Fiscal policy portrays lack of will government shows towards Tax Collection rather than expanding the Tax Base taking off some pressure from the Salaried Class of whose tax is deducted at source.
o Government seems least interested in adding professionals, agriculturists & businessman who are exempt from paying taxes.
7. Amnesty For Tax Evaders & Money Launders:-
o Ironically promoting Amnesty Practices allowing Tax Evaders to pay taxes and get 10 years exemption from getting Tax Audits, asking the Tax Evaders to show their appropriated earnings government is encouraging to present unreal picture and getting away with additional facilities of avoiding any penalty, additional tax & audit.
o Tax To GDP Lowest Ratio: - Such Taxation practices are Pakistan has one of the lowest Tax to GDP Ratio in the world (<10%) makes it even worse off begging IMF for further loans to pay off the previous ones.
8. Cut in Development Expenses & Subsidy Removal:-
o Public Sector Development Program has cut the developmental budget to $321 bn by eradication of subsidies on energy Tariffs. Mr. Dar has admitted SBP printed fresh notes worth 280 Bn in 4 months a short remedy for paying off Circular Debt.
9. Poverty & Basic Educational Situation:-
o 2/3 rd are not able to contain food 2 times a day 2 Billion children are out of the schools but the focus is somewhere else.
10. Political Gimmicks:-
o Rather than paying heed to above figures a Political Gimmick has been brought to light. PM Youth Loan Scheme a portfolio worth 100 Billion chaired by none other than Daughter of PM Maryam Nawaz Sharif who apparently is doing a P.H.D in politics but has no prior experience of handling such position before. This is the level of interest Ruling Party is giving to 180 Million people. Procedure of this scheme is surely questionable. One cannot obtain a loan without having guarantee of a either
o A Govt official 15th Grade or higher.
o Person having bank account worth 150% of loan applied for.
In both the above cases a guarantor has to undertake to payback the dues & stand responsible if the principal debtor fails to pay the loan. This condition makes it virtually impossible for the applicant to find a person fulfilling either of the above conditions. Its Ridiculing masses at its peak. If somehow one finds a Guarantee he will get a loan @8% Markup repayable from 13th month of its issuance. In the current economic scenario it is hard for the existing business to break even. The chances of such loans ending as default are very high.
These economic Indicators are a big question mark on performance of present Government who have already left their predecessors Incompetence far behind within mere 200 Days.
Rest in Peace Sanity
Can be reached @fahadmujaddad@yahoo.com
Twitter : @FahadReformer
Gone are the days when there was no planning prior to coming into power. In almost all the developed countries even India (Developing) political parties get votes on their manifestos on how to deal with key issues. May 11th 2013 gave an opportunity to PMLN to form Federal Government.
Hence it is for the 3rd time Nawaz Sharif would become Prime Minister of Pakistan with his experienced team ready to steer the ship out of what former government had left them in. A lot of good things were expected in the economic area. Ishaq Dar as Finance Minister meant a guy acceptable to IMF as the former FM’s needs their ‘nod’ as per past practices.
Past 6 months of PMLN performance in economy give only one indicator, that they haven’t learned anything from the past.
1. Inflationary Impact & Indirect Taxation:-
o Consumer Price Index (CPI) Inflation has gone to 10.9% in November 2013 as compared to 9.1% in Oct 13 & 6.9% in same period for year 2012 when govt came in power it was around 5% almost doubling the Inflations. The purchasing power of people has decreased viciously. In current budget GST has been added from 16% to 19% thus adding indirect taxes on almost every product.
2. Exchange Rate Instability & Foreign Exchange Reserves:-
o Dollar $ has gone escalating to 110 Rs from 98 Rs. Investors’ confidence has shattered badly with the government’s lame attempts to curb the Exchange Rate Stability. This means 6 months back a product which costs Rs 98 will now be for Rs 110.
o Foreign Exchange Reserves have fallen to 12 year low by $2.9BN. Record breaking downward spiral for economy.
3. Unemployment:-
o Gas Load Shedding in winter season means at least 5 Million laborers have to sit at homes for another 3 months till end of this winter season.
4. Total & Foreign Debts:-
o Debts have added by Stooping 1 Trillion (1000 Billion) Rupees in just 3 Months putting additional pressure on Exchequer. Pakistan’s Debt to GDP ratio is Greater than 55%.
Mean Rs 55 out of 100 are paid in debts.
o Foreign Debts have increased by Rs 403 Billion due to Currency Devaluation Taking total debts to Rs 15 Trillion. In an Economy where more than 55% of our budget goes down as Debt Repayment the currency devaluation worsens the picture adding 70Bn with each Rupee Rise in the price of Dollar vs. Rupee.
5. Ridiculing Investors:-
o While Mr. Dar adds to the agony of businessmen & banks seeking $ for foreign trade payments, tipping the traders to sell of their dollars. It’s like ridiculing those who have invested in country with ever rising cost of production thanks to electricity prices being doubled in 6 months.
6. Tax Loopholes:-
o The directionless Fiscal policy portrays lack of will government shows towards Tax Collection rather than expanding the Tax Base taking off some pressure from the Salaried Class of whose tax is deducted at source.
o Government seems least interested in adding professionals, agriculturists & businessman who are exempt from paying taxes.
7. Amnesty For Tax Evaders & Money Launders:-
o Ironically promoting Amnesty Practices allowing Tax Evaders to pay taxes and get 10 years exemption from getting Tax Audits, asking the Tax Evaders to show their appropriated earnings government is encouraging to present unreal picture and getting away with additional facilities of avoiding any penalty, additional tax & audit.
o Tax To GDP Lowest Ratio: - Such Taxation practices are Pakistan has one of the lowest Tax to GDP Ratio in the world (<10%) makes it even worse off begging IMF for further loans to pay off the previous ones.
8. Cut in Development Expenses & Subsidy Removal:-
o Public Sector Development Program has cut the developmental budget to $321 bn by eradication of subsidies on energy Tariffs. Mr. Dar has admitted SBP printed fresh notes worth 280 Bn in 4 months a short remedy for paying off Circular Debt.
9. Poverty & Basic Educational Situation:-
o 2/3 rd are not able to contain food 2 times a day 2 Billion children are out of the schools but the focus is somewhere else.
10. Political Gimmicks:-
o Rather than paying heed to above figures a Political Gimmick has been brought to light. PM Youth Loan Scheme a portfolio worth 100 Billion chaired by none other than Daughter of PM Maryam Nawaz Sharif who apparently is doing a P.H.D in politics but has no prior experience of handling such position before. This is the level of interest Ruling Party is giving to 180 Million people. Procedure of this scheme is surely questionable. One cannot obtain a loan without having guarantee of a either
o A Govt official 15th Grade or higher.
o Person having bank account worth 150% of loan applied for.
In both the above cases a guarantor has to undertake to payback the dues & stand responsible if the principal debtor fails to pay the loan. This condition makes it virtually impossible for the applicant to find a person fulfilling either of the above conditions. Its Ridiculing masses at its peak. If somehow one finds a Guarantee he will get a loan @8% Markup repayable from 13th month of its issuance. In the current economic scenario it is hard for the existing business to break even. The chances of such loans ending as default are very high.
These economic Indicators are a big question mark on performance of present Government who have already left their predecessors Incompetence far behind within mere 200 Days.
Rest in Peace Sanity
Can be reached @fahadmujaddad@yahoo.com
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