Advisor to the Finance Minister, Khurram Schehzad, recently shared insights into the ongoing energy reforms aimed at ensuring a competitive and reliable energy supply in Pakistan. These reforms are part of a broader set of changes designed to address critical economic challenges and set the stage for sustainable growth. In his address, Schehzad outlined the measures being taken by the government to tackle various issues and improve the overall economic environment in the country.
One of the key highlights of Schehzad’s statement was the government’s focus on reducing the cost of capital to make financing more accessible and affordable, particularly for Small and Medium-sized Enterprises (SMEs). By lowering financing costs, the government aims to unlock the full potential of SMEs, enabling them to contribute significantly to the country’s economic growth. Schehzad emphasized that the objective is to maximize the economic impact of these reforms, ensuring that the benefits of affordable financing reach those who need it most.
Pakistan’s economy is currently undergoing a series of significant reforms aimed at addressing long-standing issues and fostering economic stability. Schehzad highlighted that the government has taken several important steps to correct tax distortions, which have hampered economic progress in the past. One of the most notable reforms in this regard is the introduction of an agriculture tax, which Schehzad termed a historic achievement. By broadening the tax base, the government is ensuring that more sectors contribute to the national revenue, creating a fairer and more equitable tax system.
The government’s tax reform efforts also include bringing key sectors such as retail, wholesale, and trade into the tax net. Additionally, there are ongoing efforts to rationalize real estate taxes, which have been a source of inefficiency and tax evasion in the past. Schehzad emphasized that taxation is not just about collecting revenue, but about setting the right economic direction for the country. He stressed the importance of having a clear distinction between tax policy and tax collection, ensuring that both processes are efficient and transparent.
To improve government efficiency, rightsizing measures are being implemented to streamline operations and ensure that resources are allocated effectively. True devolution of authority is also a key aspect of the ongoing reforms, with the aim of ensuring that power is distributed more effectively across the country’s various administrative levels. Schehzad pointed out that significant progress is being made on pension reforms, as well as in the restructuring of state-owned enterprises (SOEs). Efforts to privatize SOEs have also gained momentum, with the government pushing forward on various privatization initiatives.
Schehzad further highlighted the government’s core responsibilities, noting that the government’s role is to provide a robust policy framework, ensure continuity in governance, and create an environment conducive to investment. He underlined the importance of political stability for fostering investor confidence, adding that efforts are being made to stabilize the political landscape in Pakistan.
Despite the challenges, Schehzad expressed optimism about the reforms and their potential to drive Pakistan’s economic recovery. “We are trying our best, and most of all, we are positive and hopeful,” he concluded, signaling confidence in the country’s ability to navigate its economic hurdles.
The energy and economic reforms outlined by Khurram Schehzad demonstrate the government’s commitment to addressing critical issues and laying the groundwork for sustainable economic growth. By tackling tax distortions, improving access to financing for SMEs, and pushing forward with SOE reforms and privatization, the government aims to create a more competitive, transparent, and investor-friendly economy.
As Pakistan continues on this reform journey, the focus on energy sector improvements will be crucial in ensuring a stable and affordable energy supply, further driving the country’s economic progress. These reforms are set to play a key role in shaping the future of Pakistan’s economy and its position in the global marketplace.