Once the government brings out the new automobile sector policy, correcting the attitudes of car manufacturing companies, says federal Finance Minister Shaukat Tarin.
He was talking in Samaa show Nadeem Malik Live.
Car makers, he said, would have to pay penalties if they did not deliver automobiles in a timely manner.
He said that the government was eyeing how to curb import of all luxury items, including cars, adding that it would help reduce the widening trade deficit.
Most car manufacturers, he said, just assembled cars, adding that three such companies had formed a cartel, manipulating the entire market. He said that the government would soon introduce seven new car makers in the country to increase competition among manufacturers.
Global economy was hit by an economic downturn that had lowered industrial output the world over.
According to Tareen, the inflation rate in Pakistan was lowest in the world. He said that some countries were sustaining yearly inflation levels of as high as 50% while the rate of inflation rate in Pakistan was just 15% annually.
Maintaining that Pakistanis had to bear far greater inflationary burden because their incomes had stagnated. He blamed the International Monetary Fund (IMF) for this, saying that if incomes had increased they could have sustained the resulting high prices.
Pointing out that the current rate of inflation in the country was just 10%, he said that it was 18% last year.
Highlighting the government’s efforts to provide relief to the common man, Shaukat Tarin said that various measures had been initiated in this regard.
According to him, the government had started providing low cost wheat to flour mills, resulting in lowering of the price of the commodity. A subsidy programme, costing Rs150 billion, was also being started to provide essential food items at subsidized rates.
The government, he said, was working to reduce the profit of the middleman in the agricultural sector, adding that it had also sanctioned funds for building more grain silos and cold storage units.
Stressing the need to overcome line losses in the power sector, he said that the problem of deficit in this sector and circular debt would never end just by raising power tariff.
The government, he maintained, could not overcome deficit until and unless it privatized all loss making insitutions.
Increase in imports created waves in the entire market, propping up the dollar rates, he said. The government, he said, would also overcome this problem too.
According to him, the value of rupee was unnecessarily depressed and the foreign exchange rate should be determined in accordance with real effective exchange rate.
Shaukat Tarin also said that the government was trying to bring the real estate sector in tax net, adding that the government had also identified 15 million unregistered persons and Nadra and FBR would be used to get to them.
The quantum of business in the retail sector amounted to Rs18 trillion, but trades amounting to just Rs3 trillion had been registered.
Manufacturers, he said, were paying due taxes, but tax collection dwindled down the line. He said that the government would also have to manage this problem.
Sales tax, he said, had been brought down from 17% to 10% to effectively broaden the tax net.
High petroleum prices also triggered a cascading effect on prices of almost everything, that was why the government did not intend to bring domestic prices of petroleum products at par with international prices.
Shaukat Tarin also said that people would soon hear good news regarding oil facility from Saudi Arabia, adding that it would help reduce the national deficit by $2 billion.
Keeping the IMF in confidence on national economy was in the best interest of the country and if it offered programmes in accordance with our conditions it would benefit the country.
He also said that if ties with the United States improved, there would be an easing in IMF conditionalities.
Highlighting the need for intelligently handling the emerging situation in Afghanistan, he said that this could prove to be a boon for the country.
Although Afghanistan lacked dollars, but it needed essential commodities, he said, adding that if both countries opted to trade in Pakistani rupee, it would be in the interest of both countries.
He said that the government was trying to stabilize the government in Afghanistan, adding that Pakistan was consulting other countries in the region in this regard.