Economic achievements of PM Imran Khan-led PTI govt (Final Part)

ISLAMABAD: Prime Minister Imran Khan-led Pakistan Tehreek-e-Insaf (PTI) government has made achievements and failures on different fronts during the past 3.5 years while continuing its journey to complete the tenure.

The incumbent government led by Pakistan Tehreek-e-Insaf (PTI) under the leadership of PM Imran Khan witnessed many achievements on the economic front that are given below:

Economic achievements of PM Imran Khan-led PTI govt (Part V)

Commercial banks

The PTI government has taken steps to improve the banking industry across the country in view of the time and circumstances. The capital conservation buffer (CCoB) for commercial banks has been reduced from 2.5% to 1.5%.

Concessions were given in the repayment of loans till March 31, 2021, to facilitate businesses, industries and sectors to access credit repayment facilities affected by the coronavirus pandemic besides addressing the issues of the business community facing a shortage of funds via debt rescheduling.

During Covid lockdown, the loan disbursement limit was increased for the affected businesses, industries and other sectors and principal payments have also been deferred.

The margin limit for banks was also reduced from 30% to 10%.

Economic achievements of PM Imran Khan-led PTI govt (Part IV)

An amendment was made for simplifying the procedure for setting interest rate in reconciliation with the policy rate and the interest rate in which the floor discount rate was kept between 100 bps or 1 per cent interest rate.

Through the amendment, the SBP’s interest rate was restricted which encourages commercial banks to disburse loans to the private sector instead of the central bank.

To improve the loan provision from banks to the private sector, the tax rate will be increased for all the banks which are taking more deposits from the private sector, whereas, the loans from the deposited amount will be lessened up to 50%. Through the move, the private sector will be able to get a better share of loans against deposits in banks.

It should be noted that in Khyber Pakhtunkhwa (KP) and Balochistan, the private sector deposits a lot of money in the banks, but the banks are very cautious in issuing loans in the provinces.

It should be noted that in Khyber Pakhtunkhwa (KP) and Balochistan, the private sector deposits a lot of money in the banks, but the banks are very cautious in issuing loans in the provinces.

During the PTI tenure, the limit of loans to the private sector in the housing and construction sectors was increased from a minimum of 5% to 7%. It improved the access to housing and construction loans for the private sector, the provision of loans for the construction sector and the development of the housing sector became possible. As the housing sector improved, 45 other small industries and businesses associated with it have also been benefitted.

Economic achievements of PM Imran Khan-led PTI govt (Part III)

A refinancing scheme was introduced by the PTI government to facilitate loans for small business enterprises (SMEs). In this regard, credit guarantees were provided by the government and banks were instructed to continue the facilities for three years.

New successful experiments were carried out to bring the banking sector up to date with modern banking. SBP developed a state-of-the-art framework for electronic money institutions. Payment and remittance systems have been digitised.

Technology sector

Special measures have been taken for the promotion of information technology (IT) and telecom industry. For the first time in the country, complexities were removed for the promotion of exports in IT and telecom sector, in order to make its exports easier and more convenient to end obstacles in bringing foreign currency to Pakistan. Through the measures, Pakistan’s exports in the IT sector were increased, creating employment opportunities for those associated with the sector.

During the PTI tenure, IT and telecom exports alone reached $2.1 billion for the first time in 2021. IT exports were increased by 47% in only one year while the growth trend continued in the current fiscal year, and in the first seven months of July-January this year, IT exports reach $1.5 billion which is a 32.7 increase from the same period in the last fiscal year.

Economic achievements of PM Imran Khan-led PTI govt (Part II)

Exports of the IT and telecom industry as a whole doubled for the first time during the PTI regime as compared to the growth rate recorded in the PML-N era.

Automobile industry

The automobile industry grew significantly during the PTI regime. The growth rate in the automobile industry in Pakistan was the highest which was recorded up to 35.7%.

The PTI government had launched the electric vehicle policy. In the current financial year’s budget, the sales tax rate for electric vehicle manufacturers has been reduced from 17% to just 1% under the policy.

The customs duty on spare parts and equipment for manufacturing the electric vehicles was also reduced to only 10%. Through the move, electric vehicles were promoted in the country and the purpose of the decision was to save fuel besides increasing the number of eco-friendly vehicles.

Special relief was given for small vehicles during the PTI government. In the current budget, discounted sales tax rate was introduced for 1000cc and fewer vehicles up to 12.5% instead of 17%. The move helped the revival of the auto industry within a year after being badly affected by the Covid pandemic in 2020. In the first half of July-December of the current financial year, the employment opportunities in the auto industry were increased besides giving concessions to the middle-class segment for the purchases of small cars.

Economic achievements of PM Imran Khan-led PTI govt (Part I)

After the current financial year budget, the prices of small vehicles were dropped due to the government policies and its sales were increased by 71% in the first half of July-December of the current financial year. In the financial year 2021, the sales of vehicles had increased by 57% and the sales of vehicles had reached 236,390 units.

The calendar year of Pakistan’s auto industry was also spectacular.

According to the data of the Pakistan Automotive Manufacturers Association (PAMA), a total of 1,955,193 vehicles and motorcycles, buses, trucks and tractors were manufactured in the 11 months from January to November 2021 as compared to 9,03701 in the same period in 2020. The data showed that an additional 1,051,000 vehicles, motorcycles, rickshaws, tractors, buses and trucks were manufactured during the calendar year 2021 as compared to the first 11 months of 2020’s calendar year.

The government reduced the rate of customs duty on spare parts for hybrid vehicles to 4% and also made a historic decision to impose a reduced sales tax rate on locally manufactured hybrid vehicles. The sales tax rate on locally manufactured hybrid vehicles has been reduced from 17% to a discounted sales tax rate of 8.5%.

Due to the continuity of PTI government policies and attractive opportunities for new investors, new manufacturers started appearing in the auto industry of the country. As the competition grew, consumers began to find different options for vehicles and in Pakistan, investment was made by renowned firms including Kia, Hyundai, Changan, DFSK, MG, Proton, BAIC and Havel.