Govt inherited inflation, precarious economic crisis: Hafeez Sheikh.

ISLAMABAD -- Minister for Finance and Revenue Hafeez Sheikh on Monday said the incumbent government inherited inflation and precarious economic crisis and has to take tough decisions to cope with the challenges.

Speaking in the Senate, he said soon after coming into power, the country foreign reserves had dipped to $ 9 billion from $ 18 billion adding that the gap between exports and imports had also widen to $ 32-35 billion.

The ratio of country's exports had become almost zero, he added. The minister said the past government intentionally adopted a policy not to enhance country's exports. However, the government's top priority was to save the country from the impending default and took result-oriented decisions, he said.

He said no government wanted to go for IMF funding but it was imperative to approach the International Monetary Fund (IMF) due to the country's economic situation at that time.

The minister said the government had to introduce strict financial discipline to curtail excessive government expenditure, increase revenue collection, introduce market driven exchange rate, remove large tax exemptions and discourage imports. He said that the government did not borrow even a single penny form the State Bank of Pakistan during the last one and half year, while no supplementary grants were given.

He said the government had to take very unpopular decision of not giving any raise in salaries to the employees. He also thanked the armed forces for freezing its budget. On one side, the government's expenditures were curtailed and on the other hand, steps were being taken to enhance the tax collection net, he added.

Hafeez Sheikh said the tax collection ratio had witnessed 17 per cent increase before the COVID-19. The country was going towards stability owing to the steps taken by the government, he said. However, he said the COVID-19 affected the whole world including Pakistan. The minister said despite many challenges, the government gave a stimulus package to the people for providing relief to them during the COVID-19. He said the government, not only paid electricity bills of the three months but also gave a special package to the...