Islamabad, December 29, 2024 – Finance Minister Muhammad Aurangzeb has hinted at the possibility of shutting down the Pakistan Agricultural Storage and Services Corporation (PASSCO), as state media reported on Sunday. This announcement signals a major shift in government policy, as Aurangzeb emphasized the need for an alternative mechanism to maintain strategic reserves, potentially involving the private sector.
Aurangzeb’s remarks were made during a gathering of farmers and stakeholders in Kamalia (Toba Tek Singh), where he outlined his government’s vision for export-led economic growth. He underscored agriculture and Information Technology (IT) as the two key sectors that must drive Pakistan’s sustainable development. “We are very clear,” Aurangzeb stated, “agriculture and IT have to lead this country as we move forward.”
He acknowledged the challenges faced by these sectors, attributing some of the difficulties to internal shortcomings. He said, “If agriculture and IT face difficulties, it is because of us, so we should find solutions and promote these sectors for sustainable economic development.”
Aurangzeb expressed concern over the inefficiency of existing agricultural research institutions, which have failed to deliver meaningful advancements in crop yields. Highlighting the skewed allocation of resources, he pointed out that 80% of finances are consumed by salaries, leaving only 20% for actual research. He called for a restructuring of priorities to ensure better outcomes.
The finance minister also highlighted the government’s recent economic achievements, asserting that macroeconomic stability has been successfully achieved. He described this stability as a crucial foundation for GDP growth and expressed optimism that Pakistan’s economy is now poised to transition toward sustainable growth starting in 2025. “This is not just our claim,” Aurangzeb noted, “but independent sources have corroborated the country’s economic progress.”
Among the government’s key accomplishments, he cited reduced inflation, now in single digits, and lower interest rates. Aurangzeb also pointed to increased consumption of cement and fertilizer and a 58% rise in auto sales as evidence of prudent economic policies. These metrics, he argued, demonstrate a significant recovery and renewed investor confidence.
Aurangzeb reiterated the government’s commitment to implementing reforms in taxation, energy, and State-Owned Enterprises (SOEs). He identified the need to improve Pakistan’s tax-to-GDP ratio, which currently stands at 9-10%, with a target of increasing it to 13.5%. Simplifying the tax process, ensuring digitization, and reducing human intervention were highlighted as priorities for tax reforms.
On energy, the minister expressed optimism about reducing tariffs and emphasized the importance of addressing inefficiencies in power distribution companies (DISCOs). He advocated for greater private sector involvement in these reforms, asserting that the government’s role should be to regulate while the private sector drives the economy.
Drawing on local success stories, Aurangzeb cited Sialkot as a model for self-sufficiency and Kamalia Khaddar as a globally recognized brand. He urged stakeholders to replicate these examples to strengthen the economy.
Aurangzeb reassured farmers and stakeholders of his commitment to addressing their grievances. He emphasized that the government is determined to engage directly with stakeholders across the country, rather than relying solely on decisions made in Islamabad. “If we say we are here to serve the people of Pakistan, then we have to go wherever people are,” he said, adding that the entire budget process would involve consultations with stakeholders.
This announcement marks a critical juncture in Pakistan’s economic policy, with the potential closure of PASSCO and a renewed focus on agriculture and IT signaling the government’s broader vision for a self-reliant and export-driven economy. Farmers, industry leaders, and policymakers now await further details on the proposed reforms and mechanisms that will replace existing structures like PASSCO.