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Economy on the brink of collapse
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The recent revelations of mid-term evaluation of the current fiscal year 2009/10 are by all means not rosy.
It has cut the forecast of a modest growth of 5.5 per cent to a revised one of a mere 4 per cent, citing poor performance of the agriculture sector, the largest contributor to the GDP.
The unfavourable weather condition this year is expected to reduce the paddy and maize production — the major contributors to total agricultural production — by 11.05 and 3.91 percent, respectively
Projections that the agriculture production would increase proved hollow as agricultural yields were affected by the reduced downpour during the monsoon.
Furthermore, other factors including the liquidity crunch in the market, the increase in imports and reduction in exports, and the decline in the remittances played significant roles in the goal set not being met.
The export-import at present is about 1:8 and even worse, there is no possibility of reversal in the trend in the foreseeable future.
Manufacturing sector also did not do better enough to compensate the decline in the production in the agricultural sector.
As such, the government failed to bring down the inflation to the set seven per cent which instead on an average remained at a high of 10.1 in the first six months of the fiscal year.
The national treasury has shrunken to the tune of Rs 75 billion due to excessive investment in importing gold.
The half-yearly review also revealed that the special security plan and hike in government employees’ allowance has added an additional burden of Rs. 14 billion to the government.
It said providing budget to the numerous commissions and committees formed by the government at different times has become a financial burden.
Foreign trips by high level government officials including the prime minister have cost the nation Rs. 100 million. The first six months saw a huge surge in the expenditure on foreign trips. The government had allocated Rs. 85 million for this purpose in the current budget.
Of course, fluid politics resulting in bandhs, alarming price increases of essentials, poor market monitoring, slack law and order situation, extended load shedding hours etc, have also played havoc with the economy at large.
Several factors relating to the economic, and monetary policy operations, trade and manufacturing pattern, foreign currency inflows and, top of all, and the absence of political will have pushed the economy to the brink of collapse.
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