960406

Bilour's ideas

for economic

turnaround

IQBAL MIRZA

KARACHI: Senator Ilyas Bilour, President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has suggested a series of economic measures which, if implemented, may turn the country into a model state and ultimately help in its becoming an Asian Tiger.

He was speaking in the 'meet the press' programme of the Karachi Press Club which was largely attended by newsmen here on Saturday.

The Senator from the Frontier province strictly avoided dabbling in politics and despite pressure did not answer political questions. "I will reply to all your questions after my retirement from the presidentship of FPCCI. For the time being, I will confine myself to economic and industrial issues and use the FPCCI platform for that purpose only", he politely told the inquisitive newsmen.

Among the FPCCI officials present at the meeting were Mahmood Ahmad, Vice-President, FPCCI and Tariq Saeed, Chairman, G-77, Wajid Jawad, Mustajab Hasan and Tahir Khaliq.

Although it was his first direct contact with newsmen at the Press Club, Bilour proved to be a 'crowd puller' as he spoke to a "full house" of attentive listeners.

At the outset, Sabihuddin Ghausi gave a brief account of the role of Karachi Press Club and subsequently asked the FPCCI President to express his views on the economic problems facing the country, which the latter did in a forthright manner.

At the end of the function Bilour also handed over a cheque of Rs 50,000 as FPCCI's contribution to the KPC.

Bilour said he agreed with the expression that "Less government is the bast government" and lashed out at the bureaucracy, holding them solely responsible for the economic ills of the country. He said he firmly believed that wherever government controls were less things moved smoothly, with speed and efficiency. "The biggest curse on this country is bureaucracy which has played havoc with the economic and industrial uplift of Pakistan", he said.

The FPCCI President regretted that the Ministry of Commerce went to the Supreme Court in an effort to see that he was not elected as President of the apex trade body of the country. "I was elected unopposed", he said, "despite the fact that MOC tried its best to stall his election".

On the one hand government was a member of different international democratic trade forums but on the other hand, at home, the MOC endeavoured to indulge in an undemocratic act, he said.

Turning to economic policies and various problems being faced by the country, he said the bureaucracy accused business community of concealing their real income to avoid paying income tax. "It may be true", he said, and added that "we in Pakistan try to copy laws in Europe where a foolproof system of social security exists. In those countries people enjoy all sorts of protection, i.e. old-age benefits, education, medical facilities, etc. They get due return for the income tax which they pay to the government".

But here "do we have a social security system or old-age benefits? he asked". What are the protections which people enjoy to live through old age?

Bureaucrats "are the biggest thieves", he said and asked under which head the businessmen should account for the bribe which they said to these "thieves".

According to him the relief of Rs 40,000 in income tax was "pea-nut" taking into consideration the rate of inflation and devaluation. He calculated the rate of inflation at 17 percent and said that the relief limit in income tax be raised to a minimum of Rs one lakh.

Bilour emphasised that agriculture income should be taxed immediately. "I am convinced that till such time as agriculture income is not brought under the tax net, the chances of improvement are dim and deficit financing will continue". Although this needs constitutional amendment, but the provincial governments could impose this tax immediately and the federal government should make it a condition that provinces which did not impose and collect agriculture income tax from the agriculturists, they would have to surrender that amount from the divisible pool.

The FPCCI President presented the following formula to bring the feudals under the tax net:

Those having huge orchards should pay at the rate of Rs 2,000 per acre over and above the holding of 50 acres. Similarly, the first 70 acres for cotton growers should be free but above that, they should be taxed at the rate of Rs 1,000 per acre and sugarcane growers should be made to pay Rs 500 but the limit of land holding in this case, he did not specify.

Bilour said it was a matter of shame that a total of only Rs 2 million was collected last year from agriculturists. The feudals who enjoy the best of both the worlds, i.e. rural and urban facilities, contribute minimal in the shape of taxes to the government, he added.

he said that if his formula was implemented, the government would be able to collect at least Rs 10 billion in the shape of taxes from agriculturists.

Regarding foreign investment, he said capital was like migratory birds who go themselves to places where the climate is congenial and are not forced by anyone to change their abode. Similarly, he said, if the conditions "are congenial" for investment purposes the investors would come automatically here. Similarly, he said, the MOUs have been signed in the power sector alone. "We must try to establish hydro power stations because it will not only reduce pollution, the rate of generation will also be less." MoUs cover only thermal power stations.

The FPCCI President strongly felt that the country needed consistency in its industrial and economic policies and once these are officially announced there should be no change in them for at least one decade. In this connection he offered FPCCI's platform and said that the Federation would be only too happy to organise a broad-based meeting comprising five nominees each of opposition and government, five from FPCCI, one or two bankers and similar number of bureaucrats to sit together and evolve a long-term industrial and economic policy. He was of the opinion that the country "cannot progress by issuing SROs". In fact, "this is one of the main reasons why no progress has been achieved in this field", he added.

Bilour said unless the business community was taken into confidence, no progress would be achieved in the economic field. Political differences apart, he said, the business community was a patriotic community and would never like to see any harm come to the industrial and economic progress of the country. In this connection he referred to the abolition of 12 industrial zones within one year of their establishment, which was, according to him, not a wise decision.

Bilour said that the levy of GST at consumer level was not correct. It would prove a failure. He supported fixed tax and said its abolition would not be beneficial. "The collection would fall short if fixed tax system is abolished", he said.

He said that the nation was eagerly awaiting the national budget, though several mini-budgets have already been imposed. In this connection he referred to the recent increase in the prices of diesel and wondered how its impact, falling on consumers could be avoided. He also suggested that the government should come with a heavy hand on smuggling which "is eating into the very vitals of our economy".

Bilour also suggested that unproductive expenditure should be stopped otherwise it would be an exercise in futility to expect any progress in the country.

He said he was against the use of force in any area, whether it be politics or economics. The best way of finding solution to problems "is through negotiations" and reiterated that he would adopt the peaceful way instead of adopting the policy of confrontation or application of force for the solution of economic problems.

In connection with the privatisation of UBL he said he would be willing to pay a price of Rs 19.19 per share as against Rs 15.19 which the Commission has received.