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SBP's foreign exchange reserves fall a massive $846mn, drop to $16.2bn

S.Y.A

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Pakistan should withhold PsdP spending for 2 years atleast. Provinces are already doing projects on their own hence the damage won't be that severe. Instead we can use this newly spared money on debt repayment or atleast reducing the budget deficit to zero for those two years.
the only way we can improve the situation is if tax to gdp ratio improves to 20-25%. that means registering the economy, reduction in haramkhori of tax collectors, an increase in income tax for lower income slabs. the first two parts are challenging for any government due to the legwork required, the last part is unpopular and results in loss of votes. but, an increase in collection would also mean more development spending, meaning more jobs. it would also mean improved health and education infra. all benefiting the public in the long run. but, for that, the provincial govts should be competent as well (which unfortunately some of them are not).

It is. Last year we presented a budget where expenses were 578 billion more then revenues . By witholding PSDP spending for two years will give us a surplus budget for those two years. We can actually reduce the harmfulness of deficit budget on the overall economic standing.

View attachment 811664
incorrect comaprison. that 7909 billion figure includes provincial share (nfc etc). deduct that (its more than 3000 billion, i think), and you are left with actual federal receipts. then comes the 8487 billion part, that is the total federal govt spending.

pakistan 2021 budget brief.PNG


so, shortfall of ~500 billion, plus transfers to provinces (~3400), results in a total shortfall of 3900 billion. that is how much we have to borrow each year. reducing 900 billion psdp will achieve nothing.
 
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RealNapster

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the only way we can improve the situation is if tax to gdp ratio improves to 20-25%. that means registering the economy, reduction in haramkhori of tax collectors, an increase in income tax for lower income slabs. the first two parts are challenging for any government due to the legwork required, the last part is unpopular and results in loss of votes. but, an increase in collection would also mean more development spending, meaning more jobs. it would also mean improved health and education infra. all benefiting the public in the long run. but, for that, the provincial govts should be competent as well (which unfortunately some of them are not).


incorrect comaprison. that 7909 billion figure includes provincial share (nfc etc). deduct that (its more than 3000 billion, i think), and you are left with actual federal receipts. then comes the 8487 billion part, that is the total federal govt spending.

View attachment 811669

so, shortfall of ~500 billion, plus transfers to provinces (~3400), results in a total shortfall of 3900 billion. that is how much we have to borrow each year. reducing 900 billion psdp will achieve nothing.

Okay. So tell me this. Which one would you pick if you are an economist or countries finance minister ? A shortfall of 3900 billion or a shortfall of 3000 billion ?

Also, which one is going to harm you more ? Shortfall of 3900 billion or 3000 billion ?

Also, which one can give you breathing space ? A shortfall of 3900 billion or a shortfall of 3000 billion ?

To be frank, development is already provincial domain. We shouldn't have PsdP on this huge scale now. Almost 90% of the projects that is part of PSDP are provincial nature and are of those departments which come under provincial government. Provincial governments already get share from fed in form of NFC. They should be the one paying for (and arranging fincnaces for ) those projects.
 

S.Y.A

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Okay. So tell me this. Which one would you pick if you are an economist or countries finance minister ? A shortfall of 3900 billion or a shortfall of 3000 billion ?

Also, which one is going to harm you more ? Shortfall of 3900 billion or 3000 billion ?

Also, which one can give you breathing space ? A shortfall of 3900 billion or a shortfall of 3000 billion ?

To be frank, development is already provincial domain. We shouldn't have PsdP on this huge scale now. Almost 90% of the projects that is part of PSDP are provincial nature and are of those departments which come under provincial government. Provincial governments already get share from fed in form of NFC. They should be the one paying for (and arranging fincnaces for ) those projects.
dude, every federal organization, that includes the big ones like railways, national highway authority, suparco, nust etc. operate through psdp. psdp directly creates jobs, and potentially creates revenue generating streams. ending psdp is not the way to go. it is the only expenditure by the govt that is for the benefit of the people. want to rectify the situation? collect more taxes.
 

RealNapster

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dude, every federal organization, that includes the big ones like railways, national highway authority, suparco, nust etc. operate through psdp. psdp directly creates jobs, and potentially creates revenue generating streams. ending psdp is not the way to go. it is the only expenditure by the govt that is for the benefit of the people. want to rectify the situation? collect more taxes.

The department that you mention create jobs and generate revenues through PsdP spending are the one in loss and actually not producing single penny of profit. Still, I am not forcing your to Abingdon PsdP for good, it was a suggestion from someone who know 1 bit of economics.
 

S.Y.A

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The department that you mention create jobs and generate revenues through PsdP spending are the one in loss and actually not producing single penny of profit. Still, I am not forcing your to Abingdon PsdP for good, it was a suggestion from someone who know 1 bit of economics.
nope, highways are built through psdp, they are upgraded and maintained through psdp. same with railways. even if they are in profit, they are bound by govt rules and laws to deposit all of it in treasury, they are not allowed to keep it for themselves. that is where the non-tax revenue comes from.
 

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