Govt may change economic priorities

[Lahore_Real_Estate]

ISLAMABAD: Faced with a natural calamity of unprecedented magnitude, the government is considering reprioritising economic measures envisaged in the current year’s budget to meet additional expenditures to be incurred to cope with the devastation wreaked by the flood.

“Budget might have to be reprioritised because of damage caused by heavy rains and floods,” said an official statement issued after a presentation by economic managers to Prime Minister Yousuf Raza Gilani here on Wednesday.

An official said the full impact of the damage to national economy was yet to be assessed, but it had become clear by now that economic losses were enormous and would require extraordinary measures to meet needs of the people of flood-affected areas.

He said the federal and provincial governments would have to work on a war footing and reduce expenditures which could be put off for some time and act like in a `situation of real war’. All stakeholders would have to render sacrifice, he said.

“The need for fiscal discipline and austerity has never been so pressing, so it requires a change in lifestyles and the way of governance,” he said.

The prime minister convened the meeting to review the financial situation and needs of people in flood-affected areas.

The economic team led by Finance Minster Dr Abdul Hafeez Shaikh briefed the prime minister on the budgetary position and economic pressures in the wake of rains and worst floods in the country’s history.

According to an official statement, the prime minister told the meeting that the flood disaster posed a huge challenge and the entire nation would have to rise to the occasion. Contributions for the flood-affected people had to be above political and social considerations, he said. The enormity of the challenge, the prime minister said, could only be met through a joint strategy of the federal and provincial governments to provide maximum help to flood-affected people.

He said that keeping in view of the budgetary limitations, the federal and provincial governments must strictly follow financial discipline and practise austerity.

The prime minister asked the financial team to prepare an efficient and transparent system for disbursement of funds being collected in the Prime Minister’s Flood Relief Fund among organisations concerned and the provincial governments. The system should ensure visible utilisation of funds, he added, so that benefits reached the affected people.

The directive appears to be aimed at allaying fears being expressed at home and abroad about the possibility of misappropriation of funds donated by foreign and local donors for the flood-affected people.

He directed the Economic Affairs Division to coordinate with foreign donors for the assistance being made in cash and kind and, accordingly, work out a criterion for their disbursement and utilisation.