Ramadan Approaches... Will Inflation Decrease? Advisor to the Finance Minister Khurram Shehzad
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00:00that this benefit should be transferred to the public in some way.
00:04But this is an intent.
00:05I am saying this because Ramzan is yet to come.
00:07Then the budget will come.
00:09Earlier people had hopes in the budget, now they are afraid.
00:13You are absolutely right.
00:14I am just completing this.
00:16The bleeding of the pension has been stopped.
00:19Along with that, the right sizing,
00:21that is, the federal government has a budget of $3 billion for the entire year.
00:24$3 billion.
00:25They are reducing it.
00:27There is an intent in this.
00:29They are reforming the SOEs.
00:30The SOE Act has come.
00:31According to that, they are aligning all the SOEs.
00:34There is an intent in that.
00:36Along with that, the management of debt has improved.
00:38That is why your fiscal deficit has improved.
00:40There is an intent in that.
00:41That is, the expenditure side.
00:42You remember, we used to talk about this.
00:44No one looks at the expenditure side.
00:45Everyone says that taxes should be imposed.
00:46Yes.
00:47So control the expenditure side as well.
00:48So that is being done.
00:49Because of this, a fiscal room should be made.
00:51If a fiscal room is made, then health, education can be spent on all these things.
00:55You can get more money in the morning.
00:56You can get more money in the morning.
00:57You can work on your third layer of democracy in the morning.
01:00I will talk about this in Ramzan.
01:03The ECC, which is supervised by the Finance Minister, heads this.
01:07A very good initiative has been taken in the ECC.
01:09Although this is the State Bank's prerogative.
01:12It is the State Bank's area.
01:13They control and manage inflation through monetary tools.
01:17This decision has been taken in the ECC.
01:19And not in every ECC.
01:20There are four ECCs in a month.
01:22So at least once a month, it is taken up.
01:24The numbers of inflation are visible.
01:26The numbers of inflation are visible.
01:28It has increased by 2.1% or 2.4%.
01:31So are the on-ground prices, vegetables, grains, chicken, have gone down or not?
01:37No.
01:38True.
01:39And if there is a gap in both, then it means that there is a middleman who is earning.
01:43And a common man is not getting any benefit from it.
01:45So the ECC will take action on that.
01:47To make sure that the prices are on-ground.
01:50And the paper is also visible.
01:52Paper versus ground.
01:53One thing is very important.
01:54In our country, the definition that was given, that inflation has gone down.
01:58Look at the prices of tomatoes.
02:00It has crashed.
02:01It is very good.
02:02It is very negative.
02:03We say that the farmers should not be harmed and the consumers should not be harmed.
02:06But I am saying one thing.
02:08In our country, people get confused on the definitions.
02:12Often people are commenting that inflation has not gone down.
02:15The rate of increase in inflation is less.
02:20But in our country, there are two issues.
02:23One is inflation.
02:24And the second is that there is no price control mechanism.
02:27That is, there are no elements in the market that can check them.
02:30That we are taking out the rate list, so we are getting it according to that.
02:33You said that the ECC will do it.
02:35But what will be its mechanism?
02:36Look, I will tell you that we have talked about this before.
02:39The price control mechanisms work to a certain extent.
02:43You have to do two things for sustainability.
02:46You have to improve the supply.
02:48You have to ensure the supply in the market.
02:50You know that the demand supply works.
02:52So when the supply increases, naturally no one can manipulate the price.
02:58When the tomato supply increases, the onion supply increases, the wheat supply increases.
03:02So the government or whoever is responsible for this has to improve the supply.
03:07The second thing I will say is that when there is devolution, it is the work of the provinces.
03:10Looking at the markets, structuring the markets, all this is the work of the provinces.
03:14And then below, why don't you create a third layer of democracy?
03:17That should be done.
03:18Okay, tell me one thing.
03:19Right now, there is a risk of drought.
03:22Alhamdulillah, it rained.
03:23But apart from that, there is a risk of drought.
03:25And it is being said that our food security can be greatly affected.
03:30Keeping this in mind, what arrangements are being made?
03:33Because you know about global warming, that there is an impact of climate change on this too.
03:37There has been a very big development with the World Bank.
03:40The World Bank has signed a country partnership framework with Pakistan, long term.
03:44And that is a funding of $20 billion for the next 10 years.
03:47Along with this, the IFC has a further $20 billion.
03:50You must have seen what I said in the beginning.
03:52The global chief of IMF has also tweeted that we will bridge $2 billion as private investment.
03:59Okay.
04:00Within that, there are 3-4 critical areas.
04:02In fact, there are 6 areas.
04:03The country partnership framework of the World Bank.
04:06This is the first country that Pakistan has signed with.
04:08In that, there is long term financing on poverty alleviation.
04:11Okay.
04:12There is financing on children's schooling.
04:13There is financing on your health.
04:15There is financing on climate change and climate challenges.
04:19And there is private investment.
04:20Okay.
04:21So, look, all these things are being covered.
04:22Now, what is our job?
04:23Look, the world is standing with you.
04:25The IMF has given you a program.
04:26It is a hard-earned program.
04:27Of course, it is not that easy.
04:28After the SBA, this happened.
04:29I know.
04:30Then the World Bank is coming with you.
04:31The ADB is coming with you.
04:32The IFC is coming with you.
04:33The world's big...
04:34They are not just funding.
04:35We say that we are giving funding, money and loans.
04:38Look, there are soft loans.
04:39Yes.
04:40They are at a low rate.
04:41I am telling you seriously.
04:42The short-term financing is expensive.
04:45It is expensive.
04:46True.
04:47You get a long-term project and program funding at a low rate.
04:49They are not just giving you money.
04:50Okay.
04:51They are giving you technical support.
04:52So, these things will be covered.
04:53Okay.
04:54But it will take time.
04:55I have one thing.
04:56It is a very important question for everyone.
04:57Till now, the increase that is said to be suppressed is of the salaried class.
05:04Yes.
05:05That is, on the issue of taxation, on the other hand, we have been seeing and
05:07we have been discussing with you that the Tajir Dost scheme.
05:09Somehow, give a tax of 100 rupees.
05:11And we know and you also know that in the multiple areas of Karachi,
05:14the business that is taking place in such a small shop is of a magnitude higher than our salaries.
05:18Absolutely.
05:19And there is no check-in balance.
05:20Yes.
05:21So, how will this surge from the salaried class fall on them and how will it transfer to other places?
05:26Look, the first thing I will tell you...
05:27Or is there any possibility of relief this time?
05:29Yes, I will tell you that a lot of realization has come.
05:34And it is that we cannot do more than what we have already put a burden on.
05:39And this is a very good thing that now we have to go for an alternative.
05:44Although it should have been done a long time ago, but it is getting better.
05:47So, now you have increased from three areas.
05:50And I will tell you that a very important development has taken place.
05:52That has happened on the agriculture tax.
05:53You see, all four provinces have approved the legal framework of Labbaik.
06:00Okay.
06:01So, there is also KPK in it.
06:03Punjab did it, KPK did it, Sindh did it, Balochistan did it.
06:06But this is a very big development.
06:07It is historic.
06:08I think we are not able to tell it in that way.
06:10This is a very big development that the agriculture tax has been implemented.
06:14Okay.
06:15Secondly, retail, wholesale and trade.
06:17There is 19% of GDP and 1%...
06:19Let me tell you, agriculture and retail, these two together make up 45% of GDP and give only 1-2% tax.
06:26The remaining 55% of GDP gives 98% tax.
06:30We are going to fix this.
06:31We have held very good meetings on retail, wholesale and trade.
06:34You will see in the coming months, Inshallah, how we will bring them.
06:37Let's hope so.
06:38I have told you about the agriculture tax.
06:40Then how to rationalize the real estate.
06:42Okay.
06:43So that the activity does not get hurt.
06:44The economy continues to run.
06:45The tax comes from the right place.
06:46And a fair economy.
06:47Let's hope for the best.
06:48Thank you so much for your time, Farham Shahzad.