Kamyab Jawan delayed due to stakeholders’ dissent

ISLAMABAD: The launch of Kamyab Jawan Program (KJP) has been delayed for the time being mainly because some stakeholders are yet to finalise modalities for putting this highly ambitious plan in motion.

The government wanted to launch KJP this week; however, it is now expected to inaugurate this politically-motivated plan by end of this month.

Different stakeholders are not on the same page so efforts are underway to evolve consensus in order to adopt bottom-up approach because the incumbent Finance Minister Shaukat Tarin believes the trickle- down approach had failed to yield any desired results so far.

The government plans to disburse Rs1.6 trillion among low-income groups for different schemes i.e., low-cost housing and microfinancing with the help of Akhuwat and other entrepreneurs.

Former finance minister Dr Hafiz Pasha was critical of this ambitious programme. He argued the budget deficit was likely to touch 8 to 8.5 percent of the GDP for the current fiscal year in the wake of apparent slippages on the front of Petroleum Development Levy (PDL), revenue surplus to be generated by provinces, privatisation proceeds. It would make it highly difficult for Federal Board of Revenue (FBR) to meet its revenue collection target as well as result in an overrun on expenditure side, Pasha had said.

He further argued that keeping in view the volatile situation along Afghan border, the security expenditure was expected to go up against the envisaged allocation for the current fiscal year.

The government had envisaged the PDL collection of Rs610 billion, revenue surplus generated by provinces Rs570 billion, and privatisation proceeds fetching Rs252 billion. So in totality the budget deficit might exceed to 8 to 8.5 percent of GDP, equivalent to Rs 4.5 trillion, against the set target of 6.3 percent of GDP.

Dr Pasha had suggested the government should intervene in a targeted manner and provide loans to SMEs (small and medium enterprises) sector.

“When the government will become desperate to borrow to finance its budget deficit then the private sector will definitely crowd out” said official sources.

The government wants to disburse loans of Rs1.6 trillion during the period of its remaining tenure, which is highly ambitious. Keeping the economic scenario in view, it’s highly unlikely the banks will lend money to risky areas when government securities offering guaranteed higher returns are available to invest in.

Who is going to absorb the subsidy amount when the banks will be forced to lend money at subsidised rates? While under the IMF (International Monetary Fund) programme how will the finance ministry be able to convince the fund for doling out resources is still beyond comprehension?

“This KJP will be launched and will be run-in go-slow manner because ambitious targets of disbursing loans worth of Rs1.6 trillion even in three to five year seems unviable” the official source said.

Federal Minister for Finance Shaukat Tarin on Tuesday held meeting with Prime Minister’s Adviser on Poverty Reduction Sania Nishtar and committed to extend her all-out support to make this programme a success. In order to bring transparency, it was also decided the loans would be disbursed among those who would register into National Socio-Economic Registry.