ISLAMABAD: Finance Minister Senator Mohammad Ishaq Dar said on Thursday said management of sub-national finances was an important subject with which the federal and provincial governments have to deal for better economic management.
“Keeping in view the requirements of the country and inline with the PML-N Economic Agenda, better economic management is the top priority of our government”, he said.
Addressing workshop on strengthening sub-national fiscal management arranged jointly by the Ministry of Finance and World Bank Group, the Finance Minister further underscored that fiscal sustainability cannot be achieved without sound fiscal and financial management.
“Wherever and whenever there is a departure from fiscal prudence and matters are allowed to drift over a period of time, as happened in the recent past in Pakistan, the economy has had to pay a heavy price in the shape of inflation, high unemployment, high debt burden and slow economic growth,” he added.
The Finance Minister said that “our Government is fully aware of the fact that fiscal consolidation and prudent debt management are vitally important for a better economic future.”
“For this, we have articulated a Medium-Term Budget Strategy in which we will aim to reduce fiscal deficit to around 4% of GDP in the next three years”, he added.
This, he said would result in reduction of public debts to less than 60% of GDP.
The Minister said :”This Conference comes at an opportune time when the 7th NFC award is coming to a close next fiscal year and preparations for the next NFC Award is due to begin, I shall look forward to the recommendations of this conference”.
In the opening remarks Dr. Hamid Mukhtar (Senior Economist at World Bank) thanked the Finance Minister for addressing the inaugural session of the Workshop.
Dr. Mukhtar, while briefing the participants said that according to Article 167 of the Constitution, Sub-National Fiscal management is a constitutional requirement.
After the 18th Amendment and the 7th NFC Award, when the Provinces have more fiscal autonomy and greater powers to make allocations, employing funds in important development projects is the biggest challenge, he remarked.
Paul Welton, Acting Country Head of World Bank at Islamabad in his remarks said that it was essential to manage government’s financial operations in the present date; the Debt Limitation Act has actually increased government’s responsibilities because it has to stay in the constitutional limits of public debt ratio along with providing resources for key development operations.