Jun 16, 2005
Islamabad: Although the Federal Budget 2005-06 has envisaged some measures to benefit the common people, the budget should incorporate such measures which give more direct relief to the citizens and consumers. These views were expressed in a seminar organized by the Consumer Rights Commission of Pakistan (CRCP). It was suggested that a consumer welfare package should be made integral to the budgetary proposals, which are presented by the government every year.
Speaking at the seminar, Dr. Salman Shah, Advisor to the Prime Minister on Finance, said that the government had presented a balanced and realistic budget in the given circumstances. He said that the overall approach to the budget was based on sustaining the achieved growth rate of 8.4 percent, which should lead to higher standards of living. He hoped that the current rate of economic growth would double in nine years, which would substantially benefit the consumers. The government has decided to raise the expenditure on social sectors up to 5 percent of GDP till 2009. The government was taking steps to have greater access to the market and generate employment. He said that the government would give a subsidy of Rs.47 billion under this budget, mainly to the power sector to keep the consumer prices low.
Mr. Syed Naveed Qamar, Member National Assembly, said that the process of budget making was not transparent. There are few opportunities for the public and even for the parliamentarians from the opposition benches to influence the budget. He termed the quality of parliamentary debate on budget unsatisfactory. He termed the increase in minimum wages insufficient. The government should make it mandatory to comply with this rule in all contracts made to the private sector by the government. He was of the view that reduction in excise duties would not necessarily benefit the consumers. While the 5% duty on urea has been exempted but in actual the prices have gone up.
Mr. Mazhar Siraj, Research Fellow Consumer Rights Commission of Pakistan (CRCP), in his presentation, said that effectively, the budget was ‘growth oriented’ and ‘business-friendly’. A predominant view about the budget is that it does not provide sufficient relief to the consumer. Most of the relief envisaged in this budget is routed through market mechanisms. Reduction in duties on 1,870 items may increase supply but there is no guarantee that its benefits would be passed on to the consumer. He said that the government should make a Consumer Welfare Package integral to every budget, which should include proposal for direct relief to citizens, steps to lower inflation, increased allocations to basic services, and institutional support to the organizations, concerned with consumer protection.
Addressing at the seminar, Dr. Shahid Zia, Executive Director Lok Sanjh emphasized the need to look the budget from the perspective of poverty reduction. Given the relevance of agriculture sector with the welfare of consumers, the government should develop a comprehensive agriculture development policy, which should make part of the budgetary proposals. Mr. Ahmad Mukhtar from Aaj TV said that the real challenge was to ensure that dividends of duty reduction are passed on to the consumer. He said that a lot of money goes to subsidize inefficient public sector institutions, which can otherwise by spent on consumer welfare. A total of Rs.245 billion has been spent in this head.