Charter of the Economy Overall, the savings rate of Pakistan will need to be significantly augmented if the rate of investment is to be raised. In particular, the gap between revenues and current expenditure will need to be reduced in the Federal and Provincial budgets. Also, stronger incentives may be given to companies to raise their retained profits by raising the advance tax on dividends. Similarly, the rates of return on National Savings Schemes should continue to be relatively attractive. These should provide real returns in relation to the rate of inflation and the yield curve should be steeper to encourage long-term savings. Employment Between 2014-15 and 2017-18, 1.4 million jobs have been added annually, when the labor force is increasing currently by over 1.6 million. The‘true’ unemployment, rate, inclusive of underemployment and the‘discouraged worker’ effect, is higher than 8 percent. The impact of COVID-19 had been to raise the unemployment rate to almost 15 percent in 2019-20. Process of reabsorption of laid off workers is currently proceeding at only a moderate pace. The annual rate of expansion of the labor force will approach 2 million in the next few years and accordingly this many jobs will have to be generated annually. This again can only be ensured if the GDP growth rate approaches 6 percent. There are also three dimensions to the labor absorption problem. First, the level of agricultural employment has been falling and this is leading to more rural-urban migration, which is growing by almost 4 percent per annum. Consequently, more off-farm jobs and urban employment will need to be created to reduce pressure on the cities. Second, bulk of the increase, almost 70 percent, in jobs outside agriculture are being provided in the informal sector. There is a visible gap in meeting the standards of‘decent work’ in this sector. Third, there are over 5 million‘idle’ male youth. A special program must be launched to productively engage these youth, otherwise there is the heightened risk of more crime and a reversion to fundamentalism. Rate of Inflation The rate of inflation remained exceptionally low at an average of 3.7 percent from 2015-16 to 2017-18. This was the consequence of a relatively modest rate of monetary expansion of 12.5 percent annually and the maintenance of an artificially overvalued exchange rate, as shown in Table 1.3. Further, food prices also rose moderately on average during these three years by less than 4.5 percent. The year, 2019-20, witnessed a big upsurge in the rate of inflation to almost 11 percent. Due to shortages and hoarding, food prices rose by 15 percent. A large part of the inflation 6