We are now a days quite concerned about new taxes coming in, electricity rates going up because subsidies earlier given by government are being taken away due to IMF’s pressure, tax structure being revised and what not. I mean we already have so much to worry about on key national fronts like politics, governance, security, terrorism, international relations and the list goes on and on. What has gone wrong all of a sudden on the economic front?
Well, floods caused havoc and ruined infrastructure as well as production capacity of agriculture, the backbone of our economy. Terrorism had already choked inflow of Foreign investment and adversely affected confidence of local investors. New jobs are not being created and overall despondency has taken over masses’ sentiments who find nothing going right in Pakistan.
Now, what to do? Isn’t this all a crisis situation rather crises because there is not one crisis!
In business and management, it is often said and practiced that when things get out of control and become complex, it might be a good idea to go back to basics. Perhaps it is time to do so with the business of this country. Let’s try getting back to basics at least in words.
A country is no different from a business, an entrepreneur’s venture. It earns Revenue (taxes) and has some Costs (its governance and functioning). Now lets see how we can make Revenue minus Cost positive, which is a definite objective of a successful business.
Basic mathematics tells us that either increasing Revenue or decreasing Costs or both can help us bring Revenue minus Costs into positive. Lets do both of these i.e. increasing Revenues and decreasing Costs.
Increasing Revenue means that more tax revenue is required. Now, either increase rate of taxes on those who are already paying or make those who are not paying, pay it. Latter options seems more plausible because those who are already paying shouldn’t be overburdened if there are some who are not paying. Who are those? Agriculture sector tops the list. Tax it. Make it in the same way industrial and corporate sector is paying tax i.e. those who earn more should pay more. Then in order to gain more tax from those who are already paying a ‘novel’ idea can be to help them earn more so they can pay more tax. They wont mind paying more tax if they are helped to earn more. How it can be done? Well, help them export more. We have brains sitting in Export promoting bodies who can do excellent marketing and help our businesses do excellent marketing on international level. Give them incentives to export more and lets make our industry and corporate sector eye those markets whose people do not know where Pakistan is located? (yes. there are countries like this). Identify what all we can export and if we do it honestly, we will find a long list of items and an equally long list of producers producing those items.
If we get it all right, many industries and sectors will be able to earn more and pay more taxes.
Next comes reducing costs. Where are we spending more? Lets look at our expenses top down. Meaning starting from parliament and presidency down to government’s offices, lets cut our expenses. Any top-notch holder of public office, whoever he is and whatever sacrifices he has given for our country cannot travel in all or even some 70-80 cars which flank him like crazy when he is going from point A to point B. He can sit on one seat of one car. If he wants he can have the whole of rear seat for himself or even the whole of car for himself, but lets not have ambulances, fire trucks, police officers’ cars chasing or flanking him like anything. Its waste of money and more than that it gives totally wrong signals to the whole machinery of government that we can spend and waster as much as we want. We cannot. Its a fact and lets establish it sternly. It is simple not possible in a country which is ‘developing’.
Lets develop/grow first and be able to earn an income and then think about spending like crazy (wasn’t it what our parents used to tell us).
If we seriously think about it, its all very simple but requires seriousness.
May Allah always guide us towards right path and help Pakistan prosper. Amen.