Former Caretaker Minister of Commerce and Industry Gohar Ejaz has emphasized the need for the government to implement comprehensive economic reforms, alongside increasing taxes, to reduce expenditures.
According to the 24NewsHD TV channel, Gohar Ejaz highlighted that the upcoming budget includes a massive interest payment of 9 trillion rupees, which now accounts for 9% of the GDP. He pointed out that at a 20% interest rate, the debt servicing costs are unbearable for the economy.
He expressed concerns that government expenditures could exceed 25 trillion rupees in the next fiscal year, reaching 23% of the GDP. Ejaz suggested that public spending should be reduced by 5% of the GDP in the forthcoming budget.
He criticized the government for its lack of visible measures to reduce the budget deficit, which the business community does not see any efforts to address. He also pointed out the absence of a plan to reduce losses of public sector enterprises in the budget.
Furthermore, Ejaz mentioned that there has been no consideration of revising agreements with Independent Power Producers (IPPs), which are receiving over 2 trillion rupees in capacity charges. He accused the IPPs of holding the business community and the public hostage and recommended converting IPP agreements to "take and pay" contracts.
He also noted that there are no steps being taken to end subsidies in the energy sector. According to Ejaz, economic difficulties have worsened due to 12% inflation and high-interest rates.