Reducing inflation

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The inflation rate in the country has declined to 8.89 percent year-on-year in June 2019 from 9.11 percent in the previous month, as prices rose at softer pace for: food & non-alcoholic beverages 7.52 percent vs 8.58 percent in May; transport 14.96 percent vs 16.67 percent; and clothing & footwear 6.21 percent vs 6.49 percent.

 Meanwhile, inflation accelerated for both housing & utilities (9.99 percent vs 9.96 percent) and furnishing & household equipment 9.26 percent vs 8.75 percent. On a monthly basis, consumer prices advanced 0.36 percent in June, after a 0.78 percent rise in the prior month. Inflation Rate in Pakistan averaged 7.76 percent from 1957 until 2019, reaching an all time high of 37.81 percent in December of 1973 and a record low of -10.32 percent in February of 1959.

 In this scenario, the government is trying to increase revenue but reforms in the tax administration are equally important which should not be ignored. Agriculture sector is almost twenty percent of the GDP which should be brought into the tax net while documentation of this sector is necessary as it has become a safe haven for the tax cheats. Last year the government collected almost Rs4 trillion in revenue while increasing it to Rs10.5 trillion by 2024 will be a challenge.

 The authorities to control inflation lest it becomes a problem for the government. Profiteers must be dealt with an iron hand as they have crossed all limits to bleed masses white as the country is moving from medium to high inflation. A hundred percent documentation of the economy and hundred percent control over smuggling are ambitious targets which have not been achieved by any country.

 Action against benami accounts is laudable as ninety-nine percent of such accounts are being operated by the business community which must be dealt sternly. The business community is protesting tax measures to get relaxations while the government has decided to implement all the decisions in letter and spirit in the national interest.

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