Committed to PEOPLE'S RIGHT TO KNOW
Vol. 5 Num 716 Sat. June 03, 2006  
   
Business


Pakistan to tackle poverty with development budget


Pakistan will spend a record 415 billion rupees (6.92 billion dollars) on development this year to fight poverty and maintain a growth rate of more than six percent, officials said.

The national budget for fiscal 2006-2007 starting July 1, to be unveiled in parliament on Monday will "focus on human and infrastructure development," minister of state for finance Omar Ayub said.

Development will be allocated 415 billion rupees (6.92 billion dollars) compared to 4.5 billion dollars in the previous budget.

Ayub did not divulge the size of the budget but other officials estimate it at 25 billion dollars, against the outgoing year's revised budget of 20 billion.

"The new budget would help create more job opportunities, promote developmental activities besides protecting the interest of weak segments of the society," Ayub said.

The budget comes amid resentment among the salaried class and low-income groups with inflation running at 13 percent and unemployment at nine percent, economists said.

More than 25 percent of Pakistan's 150-million people live below the poverty line.

In a pre-budget briefing Ayub told reporters on Wednesday that the government plans to bring down inflation to less than eight percent.

He said gross domestic product (GDP) growth was around 6.6 percent.

However the fiscal deficit rose this year from 3.5 percent to 4.2 percent of GDP, due to the massive earthquake in October that killed more than 73,000 people in Pakistani Kashmir and North West Frontier Province, he said.

The government hopes to meet the gap through taxes and borrowing. Officials hope revenue collection will rise to 14.7 billion dollars from 11.5 billion this year.

Ayub said unemployment was declining as 5.58 million new jobs had been created over the past two years and poverty reduced to 25.6 percent from 32.4 percent in previous years.

President Pervez Musharraf this week said Pakistan would be able to achieve the UN-set poverty ratio of 13 percent by 2015.

"Investment is flowing into Pakistan from all over the world and in every sector," Musharraf said.

"More jobs are available today - but we have to create more jobs - and we are determined to reduce poverty through employment generation."

Direct foreign investment in the first 10 months of 2005-06 was three billion dollars, compared to 1.5 billion dollars the previous year.

"This is new Pakistan moving forward and we will lift the country to new heights of economic progress," Musharraf said.