Address to the Nation

Mohtarama Benazir Bhutto

Prime Minister

Islamic Republic of Pakistan

Islamabad

June 8, 1994

My brothers and sisters, Assalam-o-Alaikum!

Today, I am addressing you on a subject which is extremely important for us. It is the economy of the country. What were the economic conditions that have been inherited by the People's Government? What has been the performance of the People's Government during the last eight months? And what steps are being taken in future for the economic progress?

Since the advent of Independence, dictatorship and democracy have been engaged in continuous struggle against each other. However, due to prolonged dictatorial rule, the country has not been able to achieve the desired progress in economic field. Ever since Independence our movements for restoration of democracy have continued unabated. We are extremely grateful to God that having been able to create political stability in the country we are now in a position to formulate such plans which will not only ensure complete independence for Pakistan but will also help in freeing the people from poverty, exploi­tation and ill health. To achieve this objective we have prepared a well-conceived and comprehensive plan. Together with political stability we also want to create economic stability and Insha-Allah with the help of our prayers we shall be able to establish economic stability in the country. Even slightest negligence on our part can result in creating highly explosive economic conditions. We are determined to forestall ruination at all costs. People are fed up with political polarization. They want to have a positive programme for banishing un-employment and dearness. This is what they expect of their Government. Every patriotic citizen wishes to have economic stability in the country so that private sector is able to demonstrate its capabilities.

We want the Government to protect interests of the weaker segments of our society and save them from exploitation. Keeping in view expectations of the people, the Government is paying greater attention to the betterment of economic conditions.

The prevalent ills and weaknesses of our economy cannot be eradicated through interim and temporary measures. We need far- reaching steps and long-term planning. In the past the financial management of the Government was mishandled which caused enormous loss to the country. We had reached a stage where salaries of the government servants were paid after seeking loans. The heavy borrowing by the Government from Banks on high interest rate left nothing for the private sector.

Today I am going to speak to you about certain bitter and painful realities. The enormous increase in national debt is a glaring proof of economic mismanagement. In 1981, public debt amounted to Rs. 150 billion with a liability of Rs. 6 billion as interest, but during a period of 10 years the public debt has increased to more than Rs. 120 billion and interest money has gone up to Rs. 100 billion. It is indeed most astonishing that earlier we used to spend more on Defense of the country but today our Defense expenditure is less than the amount paid as interest on our borrowings. Every previous Government has played some part in the economic mismanagement of the country but Nawaz Sharif Government was extremely wreck less in this regard. It is our misfortune that a person who claimed to change the economic life of the people adopted such policy which completely destabilized the basic economic structure of the country.

During the three years rule of Nawaz Sharif Government all the indexes of overall economic performance like budget deficit, balance of payment, price index and monetary expansion were demonstrative of economic disaster. From 1991 to 1992 and 1993 the budget deficit went up from Rs. 56 billion to Rs. 107 billion, a two-fold increase in one year thus raising its share in GDP from 6.5 per cent to 8 per cent. The adverse balance of payments also rose from 1.5 billion dollars to 3 billion dollars, yet another, increase by two times and from 3.8 per cent to 6.3 per cent in GDP. Prices escalated by 10 per cent and circulation of money went up at the rate of 20 per cent per year. Sixty thousand persons were provided taxis at the cost of national exchequer while 13 crore people suffered from load shedding. If the amount spent on yellow cabs was diverted to power generation there would have been no load- shedding in the country. Production and employment opportunities would have increased. And who received yellow cabs? The matter is being investigated. You will be sorry to know that most of the yellow cabs were given to holders of fake identity cards, thus they managed to take away taxi cars free of cost. If these taxis were given to unemployed youth to those possessing driving licenses it could be said that although 13 crore people were suffering from load shedding yet some young persons have benefited from the deal. But the reality was completely different. Taxis were doled out free of cost on the basis of fake identity cards deposited with the Banks and chits written in the same hand recommending allotment of cars to certain persons. Thus taxis were gifted away to their favourite and were not meant to be used as public transport. It is very often reported in the press that yellow cabs have been seen in Afghanistan as well as in Iran. Obviously those who received yellow cabs free of cost disposed them off and took away the money. It would have been better if these taxis were given to un­employed persons.

Projects like Motorway, undoubtedly a 'white elephant', were initiated merely to impress the people. Even its feasibility report was not prepared simply because these no imperative need for such a project. The first and foremost requirement of a project before its launch­ing is preparation of its feasibility report. The World Bank while criticizing the construction of Motorway took strong exception to non- preparation of P.C.I, form and non-availability of required finances. According to the Constitution funds provided for communication sector have to be utilized after taking into confidence all the four Provinces, but in this case the constitutional requirement was completely ignored.

A Highway Board was established and construction of Motor­way was approved by the Board. The proposed Toll Tax for users of : ~ e Motorway was so high that poor people could hardly think of using t Only those who possessed luxurious cars would have benefited from it.

Brothers and sisters! You may be aware of the fact that all those projects which form part of national economic infrastructure are constructed on subsidized rates, that is, the loans obtained for such projects are taken on 2 or 3 per cent rate of interest, but the funds for Motorway were borrowed on commercial rates. Thus, our expenditure on communication sector which was 17 per cent increased two times and went up to 36 per cent, not because we were constructing new roads but mainly due to payment of interest on commercial rate. As you know Islam strictly prohibits such interest-bearing transactions which are aimed at pleasing a handful of people. In order to pay enormous amount of interest on account of this 'white elephant', funds allocated to other Ministries were reduced. The budgetary allocations of Ministries like Population Welfare, Minorities Affairs, Education and Health were drastically cut simply to construct a Motorway. We are not against the construction of Motorway but priority should be given to providing educational facilities, medical care and other basic needs to the people, control price escalation and banish un-employment.

The day is not far off when, Inshallah, we shall be able to construct Motorway in Pakistan but premature undertaking of such a project would have weakened our economy and adversely affected the poor, the workers, the laborers and the peasants. Obviously, it was an ill-conceived plan, however there might have been some other plan behind this project which I will prefer not to talk about.

We could also indulge in wasting Rs. 40 billion for the sake of cheap popularity, but we firmly believe that government is a sacred trust, a unique honor and a great responsibility. Our conscience does not permit us to deceive the poor people and the country as a whole. We wish to stand honorably and successfully before the people. The projects undertaken by us today will bear fruit for the nation tomorrow.

Our first priority is to achieve overall economic balance in the country. The basic elements of our economy like budget deficit, balance of payments, prices index and monetary expansion are indicative of downward trend. It has seriously disturbed the economic balance of the country. With the help of your prayers, our initial measures to put the economy on even track will be fruitful.

During the past eight months, with a view to meeting the budget deficit, we have borrowed only 10 billion rupees from the Banks whereas last year 60 billion rupees were borrowed. Lesser borrowing by the Government provides greater opportunity to private sector to utilize financial resources for establishing new factories, increasing national production and offering more jobs. Together with that the monetary expansion has not gone beyond 5 per cent whereas last year it was 60 per cent. Tax recovery has shown 18 per cent increase. We have been able to achieve this target due to our commitment with you that the Govern­ment will not allow taxation system to be plagued with corruption. We have not permitted any one to pressurize our elected representatives for appointment of their favourite persons in the Customs Department. Why do certain people want to have men of their choice? Because they do not want to pay taxes, they wish to avoid paying taxes by having people friendly to them. We have, however, accepted the challenge and with the backing of your good wishes have the courage to speak to our MNAs that the people have elected us to provide them a clean government and not to indulge in underhand dealings or 'horse trading'. If you are prepared to have an unblemished government then we can move together, but in case you are not ready to do so, I will have to go back to the people because I have come from the masses, I have a commitment with them. I will go to the people and take them into confidence. I am however grateful to my MNAs. All the Parliamen­tarians agreed with my views and said you were right; democracy can survive and be respected only if we do not indulge in bargaining and let the people have a good government. And what does good government stand for today is that tax recovery has increased by 18 per cent, budget deficit has come down from 8 per cent to 5.5 per cent, deficit in balance of payments has been reduced by 30 per cent, foreign exchange reserves which had dangerously decreased to the level of 300 million dollars have now gone up to two billion dollars.

During the course of next few months price hike will be controlled and brought down. A firm basis for achieving this objective has already been provided. Price escalation is a natural product of financial indiscipline and irresponsible monetary expansion. Now that both these elements have significantly improved, prices will also come down.

Taking tough decisions for the betterment of the people is always a great challenge for any political government. But every nation has to face such difficult times when it becomes imperative to take hard measures. It was indeed a difficult decision to bring down budgetary deficit. It was quite easy for the Government to borrow Rs. 40 billion from the Banks and tide over the situation, as was done by Nawaz Sharif Government but we did not do so. Such an act would have been contrary to the confidence reposed in us by the people. We have been elected by the masses to check price hike and eradicate un-employment, power shortage, poverty, illiteracy and diseases. We, therefore, decided to uproot the evil. Dearness is a cruelty which badly crushes the poor. This cruelty is the result of deficit budgeting by the Government. We cannot sit back and rejoice over our initial successes. We fully realize that in order to consolidate our successes and ensure their continuance and stability it was necessary to bring about some basic changes in the management of our economy. Here are the outlines of a stable economic programme. I wish to place before you some important features of this programme to enable you to assess the hope and attraction it has for the people. The object of this programme is to remove certain weaknesses from the economic structure and provide it a sound and strong basis. This is the programme which will completely change the economic destiny of our country and infuse new life in its lifeless body.

The total amount of public debts exceeds Rs. 1200 billion where­as the amount of interest on these debts is about Rs. 100 billion which is more than the total expenditure on Defense. This excessive financial burden has restricted our choices because a major chunk of Govern­ment's income is consumed by Defence and payment of interest. In view of our geo-political situation, expenditure on Defence cannot be curtailed. It is indeed a commendable act that despite 20 per cent increase in the Defence expenditure by India, our Defence Forces have taken a responsible stand and demonstrating their preference for economic progress have not demanded a similar 20 per cent increase in Defence budget. I am grateful to them for their co-operation with the Government for the betterment of Pakistan and national economy. I, however, see no reason for not being able to bring down the amount paid on account of interest. The People's Government is firmly of the view that the nation must be relieved of the heavy burden of debts at the earliest. The creditors should be allowed to participate in the process of privatization on preferential basis and in lieu of their loans they may purchase shares of privatized units. The amount of interest thus saved will be diverted to social sector which has helped in accelerating the pace of development in the country. During the earlier tenure of People's Government we had made strenuous efforts to lower the budget deficit but the outcome of our efforts was nullified by reckless >pending of Nawaz Government and once again we were faced with deficit financing to the extent that we had to seek loans for paying salaries of government servants. In order to put an end to such an -responsible conduct we have decided to take certain immediate steps. These steps are being taken to save the country. These steps are being - »;en to secure the future of our younger generation. These steps are being taken to move out of darkness into light. The only way to achieve this objective is through legislation. We have decided to introduce a bill in the Assembly binding the Government to keep its expenditure within the limits of its income.

I would like to tell you something about income and expenditure. Every one fully understands that the household expenditure has to be within the limits of one’s salary. However certain governments act responsibly while others behave irresponsibly. Those governments which act in irresponsible manner their expenditure is more than the income and when such a situation arises what do they do? The Govern­ment prints fresh currency notes and the more the notes are printed the more the value of rupee declines. The decline in the value of rupee also results in its devaluation at international level. And what is the cause c f pace escalation in the country? It is mainly due to lack of balance between income and expenditure. The imbalance between income and expenditure is called deficit budgeting and to meet the deficit in budget either fresh notes are printed or fresh loans are sought. Thus the entire amount is used in paying off interest on the loans or the currency has to be devalued. I therefore wish to share this information with the people of Pakistan who have political intellect and should be aware of the fact that we have to strike a balance between our income and expenditure. If we are able to achieve the required balance, which we can, then we shall be able to eradicate dearness. That is why people of Pakistan have elected me. They have elected me to banish price escalation. However, I do not possess Aladdin’s magic lamp for uprooting dearness. We will have to offer sacrifices. We shall be required to offer sacrifices, this year, for establishing balance between our income and expenditure. This will help in reducing budget deficit which will be useful for your betterment. You will feel the impact of improvement not after ten years but within a few months, and next year, Inshallah, the situation will further improve followed by greater improvement year after year. This is exactly what we wish to see, progress and prosperity of those who have elected us, who have bestowed this honor on us and who have entrusted us with this responsibility. We want to see eradi­cation of dearness, eradication of un-employment and we want a strong and stable economy in Pakistan.

My brothers and sisters !

In the past if the Federal Government suffered from some failings, the Provincial Governments were also victims of many a weaknesses. If the Federal Government increased budget deficit, the Provincial Governments also did the same. We want the Provincial Governments to run their affairs in a responsible manner.

We have decided that every year the Provincial Governments should pay a small portion of surplus income for their annual development plans. This year the Federal Government is paying to the Provinces much more than the financial assistance they have been receiving so far. Since we are introducing some changes in Tax structure, therefore in future the annual share of the Provinces will be higher than the Federal Government.

Under the old taxation system, the Federal Government received greater share, however according to the new taxation system, Provinces will have major portion of tax income. In fact, this practice is partially due to new taxation system and partially because of NFC Award. You will recall that NFC Award was approved during Nawaz rule. In accordance with the provisions of the Award the Provincial Governments said that they will not resort to deficit financing if additional funds were provided to them and the Federal Government would not be required to make up provincial deficit. But it did not happen.

Let me inform you that in 1991. Punjab received Rs. 18.6 billion. Sindh got Rs. 7.5 billion. Frontier was paid Rs.4.5 billion while Baluchistan was given Rs. 4.1 billion, however the governments in power at that time used funds most recklessly. If you pay a visit to Provinces and go to cities like Faisalabad, Karachi, Peshawar and Quetta you will find that there are no roads, no water supply or sewerage system. I would like to know how the entire money has been consu­med.

It is indeed extremely deplorable to see that in order to win over MPAs and MNAs loans were given in fictitious and fake names which have not been paid back so far. More over funds were provided for purchase of fertilizers for non-existent schemes. The amount thus paid was wasted elsewhere.

This year in 1993-94, the allocation to Punjab has almost d: -bled. It received Rs. 36.5 billion as compared to Rs. 18.5 billion paid earlier. Sindh received Rs. 18.4 billion against Rs. 7.5 billion which is more than two times of the earlier amount. Frontier also got almost double the amount, i.e. Rs.8 billion as compared to Rs.4.5 billion. Balochistan too had more than two times of its previous share. It was paid Rs. 8.7 billion as against Rs. 4.1 billion granted earlier.

I invited all the Chief Ministers and informed them that this year you will get more funds than before, partly due to new taxation system and partly because of NFC Award. The amount received by you under new taxation system should not be wasted but utilised most judiciously. History will not forgive us if this amount is wasted. Generally we are in the habit of saying that we did not get anything. I sought permission from the Chief Ministers and informed them that I was going to address the nation and lay before the people details of the amount paid to the provinces last year and how much was being earmarked in the new budget.

My countrymen!

I would like to inform you about the amount paid to the provinces last year and the allocations for the next year. Last year

Punjab was paid Rs. 36.5 billion whereas this year it will receive Rs. 49 billion. Sindh got Rs. 18.5 billion, this year its share will be Rs.24 billion. Last year we paid Rs. 8.5 billion to NWFP, this year Frontier will have more than Rs. 11 billion. Similarly, Balochistan was given about Rs. 8.7 billion last years. But this year it will be paid Rs. 10.2 billion.

Brothers and sisters!

As such, this year, Punjab is receiving 34 per cent more funds. Sindh is getting 30.4 per cent increase. Frontier is having 33 per cent increase and Balochistan is getting 17 per cent increase. In the history of Pakistan, Provincial share was never increased to such an extent as done by the People's Government. Why are we giving this increase? It is being done because people's welfare programmes like health, education, irrigation etc. are mostly implemented by the provinces and we want these additional funds to be used for the betterment of the people living in the provinces. I am grateful to the Provincial Chief Ministers who firmly promised that they will not purchase aero planes, they will not purchase pajeros, and they will not purchase land cruisers. How can we face the people if after taxing the poor for the sake of creating a balance between the income and expenditure the rulers start purchasing new cars, land cruisers and pajeros. I am thankful to the four Provincial Chief Ministers who promised to extend full cooperation to the Federal Government. I would like this additional amount to be utilised for developmental plans and not for non-developmental purposes.

Recently when I visited Karachi 1 was extremely pleased to know that KMC budget amounted to Rs.4 billion. 1 said it is indeed most heartening that they have so much money. There were times when even the Province of Balochistan did not receive so much money as the city of Karachi alone was being paid. Later, however, I was told that half of the amount of Rs. 4.5 billion was consumed for paying salaries to KMC employees, while half of the remaining amount was used for salaries of ZMC employees. So after deducting the expenditure on salaries only 25 per cent was left for the poor. This is wrong. We are not supposed to spend money on salaries, air conditioning and petrol. We are required to spend money on construction of roads, bridges, sewerage system, schools and hospitals. We have to use our funds for setting up cottage industries so as to provide employment to the people.

We have completely different thinking and philosophy. Your new Government has a new ideology. The basic object of this ideology is to eradicate dearness, un-employment and poverty from the country. We shall be able to hold our head up before the people only when we are able to achieve these objectives. Today, I can state with full confidence that we shall definitely reach our destination, because your prayers and good wishes are with the government, because the govern­ment is working for progress and prosperity of Pakistan with utmost sincerity.

Earlier, I had spoken about taxation system, now I wish to talk about taxes. It is absolutely imperative that the present taxation system in our country should be reformed in a way that it not only helps in generating greater income for the government but also eliminates the prevalent indiscipline and injustice.

Our taxation system with its narrow base has a number of evils. It lacks flexibility, it is ineffective and in just. The government because of these evils puts greater tax burden on the people every year.

We have decided to take certain basic measures in this regard. We will reform the entire system on the principle of lower tax rates and withdrawal of all the concessions. We will encourage maintenance of record under the new taxation system. Individuals and organizations will have to maintain complete record of their business transactions. This is the only way to ensure implementation of taxing system which is based on justice and under which everyone is required to pay tax strictly according to his capacity. We shall reform the present taxation system on these lines which will help in quick disposal of tax cases and laying hand on tax evaders.

Brothers and sisters!

I would like to explain the proposed new taxation system in simpler words. Under the present taxation system in Pakistan if a person earns Rs. 100/- he has to pay Rs. 40/- to the Government and be content with the remaining Rs. 60/-. The Government after deducting Rs. 40/- and giving the remaining Rs. 60/- fails to distinguish between those who consume their income and those who deposit their savings in the Banks. Under the new taxation system which was initiated by us in 1988-90 and will be further enlarged to include some new items, those who can spend will be required to pay tax while those who do not spend will not have to pay taxes. If I need a new fridge or a T.V. or a V.C.R. or new clothes or new shoes I will be required to pay tax, however, why should those who do not spend or do not need these things be taxed. So far even those who did not spend or purchase these articles were also taxed to save those from taxes who were spending lavishly. With the introduction of new taxation system this year only those who spend money will have to pay tax on all those articles which they purchase, however those who do not buy anything will not be required to pay tax. Next year we will bring down the taxation level so that presently whatever tax is being paid at lower level should be discontinued and those who earn and pay taxes should be left with greater amount. Unfortunately, so far the Government has been taxing and targeting those who have been honestly paying their taxes. They were honest, they were truthful, they were paying taxes therefore they should be further taxes, and those who were not paying any taxes and the Government was also unable to recover taxes from them were left out while those who were paying taxes were further burdened with taxes. This is wrong. There are many people who do not pay taxes and since they avoid paying taxes we instead extract more taxes from those who pay Government dues. With effect from the next year those who pay taxes will have to pay less and only those Pakistanis who wish to spend money will be required to pay tax. This is just and fair. There are numerous tax defaulters. But in order to lay our hand on such persons we will have to establish a new force and incur heavy expenditure which we can hardly afford. We have therefore decided that under the new taxation system only those should pay taxes that tend to spend. And not only that, I would like to announce and warn tax evaders that it would be better if they get into the tax network. This is the last chance for them to be covered by the tax network. Tax evaders should realize that the Government has a political will, a political determination and a political objective. They should also try to realize how and why the peoples Government were formed? The peoples Government was formed because we were not afraid of anyone else except Allah and we believed that those who follow the path of truth are always helped by Allah. That is why we have the courage which the past Government lacked. Those who have clean hands and clean conscience also have the courage to recover Government dues. You have brought us to power. It is a great honor. We shall come up to your expectations. Let me call upon the tax evaders to come under the tax network. We are preparing a plan to look for the tax evaders during the next year and also find out who were living beyond their means. In our country, so far only the politicians have been apprehended while tax evaders have remained untouched- Now that the democracy has been re­established dictatorial regime has been banished, the rule of black money and smugglers is over we shall apprehend those who are tax evaders and put them in jail. Let no one come to us and seek help for them. If you consider yourself to be an honorable person, then better visit CBR and pay your tax dues. No one will touch you. And don't think that some influential persons, whom you know, will come to your rescue. As far as this Government is concerned there are no influential or big people; All are equal before law. This Government has taken some tough and important decisions during the past eight months. This Government preferred to loose Chairmanship of the Senate but did not agree to release drug smugglers. It is this Government which has suspended an SSP who was responsible for the escape of a drug smuggler from his custody. It is this Government which has arrested a Bank President who is still in jail. It is this Government which has suspended State Bank officials for having failed to carry out their responsibilities. It is this Government which after releasing the report of the Commission appointed for investigating the fire incident in the National Assembly, suspended a Grade-22 officer and initiated enquiry against him. Let no one think that this Government lacks determination. It is our commitment with the people of this Pak land that we will give them a Pak (clean) society, and for achieving this objective we will firmly face all the conspiracies against us. Our conscience is clean. We know, we are treading Allah's path. Let them hatch conspiracies, we shall continue fighting against them resolutely. We shall not abandon our path. The basic philosophy of our social ideology is that individuals and non­governmental organizations can carry out social activities in a far better way. The Government should provide them congenial atmosphere wherein they can fully demonstrate their capabilities.

We have decided that gradually free convertibility of rupee should be made possible. Stock Exchange will have important position in the new financial system. Presently, stock markets are dealing in shares only. They do not transact business loans or securities. Henceforth it will be possible for them to handle both. We consider privatization an essential process. Our Government is giving a new concept to the privatization programme. All those organizations which can be operated by private sector will be privatized. We are also trying to link privatization programme with our plans to reduce Government debts.

It is not possible to have real progress as long as the fruits of development do not benefit low income group. In the Eighth Five-Year Plan eradication of poverty is our basic target and we have prepared a comprehensive scheme to achieve this objective.

Ever since the sale of public sector industries, prices of cement, ghee and fertilizers have considerably increased. We cannot allow growth of monopolies in the country. We must have greater compe­tition. Increase in the prices of 25 commodities of basic need used in every house will be strictly checked and controlled. This Government will extend help to those traders who wish to set up industries in undeveloped areas under the government's Public-Private Partnership scheme. The said plan envisages 50 per cent investment by the govern­ment and 50 per cent by private investor. However, after a few years government shares will be sold and in the first instance offered to those who have already invested in the said project. I wish to invite those entrepreneurs who intend to establish standardized hospitals, schools or industrial units in rural areas, to come forward and enter into partnership with the government. The investment in such projects will be on equal basis i.e. fifty per cent by the government and fifty per cent by private party. Let these projects be successfully operated by us jointly. The management of these units will be in your hands and later on, Inshallah, you will purchase government shares as well.

It is an important basic programme, a grass-root programme and wish to extend loan facilities to rural areas as well. Presently most of the loans are granted to people in big cities whereas 70 per cent population of the country lives in rural areas and we want to maintain balance in availability of loans to the people. And apart from rural population we have also to think about fishermen. Most of us know very little about this segment of our society. The fishermen use small boats, as compared to big boats owned by wealthy people, and do fishing in deep waters. These people neither have a proper and solid boats nor the facility of :: d-storage where they could stock their daily catch. We will establish public sector Banks in those areas where fishermen operate. The Banks will be instructed to advance loans to fishermen for purchase of boats and setting up of cold storages so as to improve their standard of living.

My countrymen, perhaps you have very little or no knowledge about fishermen and their activities. They contribute one per cent to our GDP and earn four per cent of our foreign exchange. It is therefore necessary that we should also co-operate with our coastal population. They are an important part of our economy.

Agriculture sector which provides employment and earning opportunities to majority of our people is victim of defective Govern­ment policies. As you may be aware, last year our agriculture suffered from negative growth rate of 3.5 per cent. We are importing 30 per cent of our wheat requirements. Surprisingly we are prepared to pay to growers of foreign countries but not to our own growers. This is not fair. We want to pay to our growers as well. That is why we have made two important decisions, one to impose tax on wealthy landlords. They will be required to pay Agriculture Tax as well as Income Tax. In addition to this, the growers will also have to be paid proper price for their produce. If in agriculture sector we want our growers to pay international prices for fertilizers, seeds, petrol and tractors, then how can we refuse international price for their produce. That country alone can be self-sufficient in food and be independent which can provide enough food to its people. We want that instead of being food importing country Pakistan should turn into food exporting country. Let me tell you that the twentieth century was industrial goods century but the twenty first century will be century of agricultural industry. It will be century of agro-based goods. The population of the world has tremendously increased. Today the greatest problem of many of countries is how to feed their people. Pakistan will certainly become a great country if it is able to provide food to her own people and also export it to other countries. That is why we have set our eyes on twenty first century and wish to provide incentives to our growers, but certainly not to big landlords. Ever since the creation of Pakistan, not once the farmers or big landowners have been taxed, In cities government servants pay income tax but in rural areas big landowners do not do so.

My father who was your first elected Prime Minister had decided in 1977 and also got a law duly approved that big landowners will have to pay tax. But then Martial Law was imposed and during the course of Martial Law big landowners and wealthy people managed to save them. However, now the time has come for the poor masses to benefit. The daughter is here to redeem the pledges and commitments of her father in helping the poor.

My brothers and sisters!

We shall improve and extend the irrigation system which helps in enhancing utilization of agriculture land and also protects it against adverse effects of weather. A big anti-waterlogging and anti-salinity plan has been launched to retrieve effected lands and make them suitable for cultivation. The plan includes Right Bank and Left Bank Outfall Drainage schemes. These schemes will help in retrieving those lands which are presently hit by waterlogging and salinity. Once these lands have been retrieved, food production in the country will increase and Pakistan will take another stride towards self-sufficiency in food. We are trying to set up an extensive network of water resources. This will have great impact on our economic progress. It will be more positive and productive than motorway plans. Our important projects are as follows:-

• Oil Refinery in Multan and Badin.

• Oil terminal on Port Qasim.

• Oil Pipeline between Karachi and Multan which will be extendable to Lahore.

• Electrification of 5000 villages every year.

• Installation of two hundred thousand (200,000) telephone connections in rural areas every year.

• Implementation of coal-mining and power generation projects in Tharparker which will provide employment to lacs of people.

• Power generation projects of 3000 MW in private sector.

• Three new ports in coastal areas.

• New transport projects in Karachi, Lahore and Faisalabad.

• Eight hundred kilometer long double track railway line from Lodhran to Peshawar.

Development of energy sector is an important part of our social programme. The plans announced by our Government for the development of this sector are revolutionary. We have made a commitment with the people that during the next five years we shall eliminate load shedding. There are people who say it is impossible. But »; feel that with the prayers of the poor even impossible things can become possible. The work initiated by us will take the country out of dark ness. The incentives offered by us to private sector for investment under this policy are for better than those given by any other country in this region. According to our estimate during the next one or two years the total amount of investment expected to be made in this sector will be much more than the total amount invested since Independence to this day. We have launched two important power projects. One is Hub Project which will cost 1.8 billion dollars and produce 1400 Megawatt: electricity. The second is Ghazi Brotha Project. A sum of 1.7 billion dollars will be spent on its construction and it will also generate 1400 Megawatt electricity. Together with these projects we hope that private sector will also produce about 700 Megawatt electricity. With the supply of 700 Megawatt from private sector and completion of Ghazi Brotha and Hub Projects, about 50 percent additional electricity will be available during five year time. That is to say we shall add 50 percent electricity to the total power generated in Pakistan since the time of Quaid-e-Azam todate. We are focusing our attention not only on energy, but also wish to improve roads. We are trying to spread a network of roads similar to highways. Accordingly National Highway is being turned into dual carriage while Indus Highway is being completed expeditiously. More over in order to ensure development of under-developed areas new roads connecting big cities in Sindh and Balochistan are being constructed. Now that the Annual Budget is round the corner, I have informed you of our activities during the past eight months and of our future plans.

My brothers and sisters!

We inherited a very difficult economic situation. You will recall that the Interim Prime Minister had observed that the economy of Pakistan was on the brink of bankruptcy. But we have tried to overcome all the difficulties. You must have seen our comments in newspapers that this year's budget will be extremely hard. Why have we used the word 'hard' and what is meant by hardship? Let me tell you that last year's budget was not our budget. Taxes imposed last years and those collected this year will be equal, may not equal but slightly less because we want to establish that we were working hard for you. May be tax mobilization this year has not benefited you, but current year's tax mobilization is less than the previous year. Moreover, errors and omissions committed in the past are also being corrected. We are incurring expenditure on three subjects and these are not of our choosing. The burden being carried by us is due to the mistakes and blunders of the past government. The past governments did not care to increase pay of the government servants. This burden will have to be borne by us. The past government borrowed so heavily that the total loans exceeded the total domestic debts of different governments from the time of Quaid-e-Azam to the earlier tenure of Benazir. The heavy burden of interest on the borrowings by Nawaz Government during its three years rule has also to be borne by us. Moreover, in our times budget deficit was 6.5 percent which went up to 8 per cent during Nawaz's rule. Under the IMF agreement we have to reduce budget deficit, however since it increased under Nawaz Government we have to strive hard to bring it down. Thus we have to carry this burden as well. This year's budget would not have been so hard if we were not required to carry these three heavy burdens. If today the budget is hard, it is so because we were starting a new chapter after overcoming the problems caused by the mistakes of the past government. Having unloaded the burden of the past we are now moving towards a bright future. We know it is not an easy path, but we also know that if we want to make Pakistan a great country, if we want to provide justice in Pakistan then it is imperative to take such steps which are absolutely necessary for the good of the country. Let us not forget that nothing is easy to achieve. When our country was under the poke of dictatorship, when people were being whipped and elected Prime Minister was hanged, we said that we shall restore democracy. We shall fight for the sake of Constitution and we shall fight for the rights of the people, but people use to laugh and say that you were mad, who can confront dictatorship? But we said the message of Islam and me message of humanity is to tread the path of truth, to tread the path of principles. We should work according to our conscience. So we all smuggled together.

Many people observe that BENAZIR is a woman and that too in an Islamic society. Earlier there has been no woman Prime Minister, how can she become a Prime Minister? However I tell them that while saying so you should remember that I am sister of the poor and since I am sister of the poor, they are with me, and since I am symbol of their hopes and aspirations we shall definitely be successful. Life is full of trials and tribulations, but the ultimate victory always belongs to the poor. People are Allah's creation. We struggled; you were the source of my strength. I am nothing. Neither had I possessed Kalashnikov nor a rifle. We were empty handed. Our only possession was faith, we had determination, and we had commitment. Today after a long and arduous struggle Pakistan has become a democratic country but not in name only. We have true democracy and it is due to you, due to your sacrifices and due to your struggle. The political battle has been won by the people. Now all of us have to wage another war. It is not political war. It is economic war.

We want to have sound and stable economy. We want to have an economy where we can banish poverty, where we can banish dearness and un-employment, where we can save our children from polio, where we can provide justice to our mothers and sisters. We want to have a society wherein we can live with honor and respect. Some people say it is just a dream, but let me tell them that is not a dream. People laughingly say how all these things can be achieved? I will like to inform them that those who have strong faith, these who tread the path of truth, those who adopt the path of the people, history bears out that ultimate victory belongs to them. This victory will be the victory of the people.

Pakistan Zindabad.