- The first ‘coronabudget’ is about to be unveiled
The PTI might well feel hard done by. It will not be able to lead the country into a land of milk and honey because it finds that its first independent budget, that for 2020-2021, will be presented on June 12, about a fortnight from now, in a time of the coronavirus. As if that was not enough, the backbone of the national economy, the agriculture sector, is under attack from a plague of locusts that has already struck. The main challenge of budget-making will be revenue-raising in a time of what seems to be an economic depression. It must also be remembered that the government does not have a free hand in this, because it was already on an IMF programme, and was unable to fulfill its agreements. As a matter of fact, the IMF had held back the third tranche of the budget, because Pakistan had failed to meet even the revised revenue target. Pakistan was about to ask for another downward revision of the target when the pandemic blew up in the face of both the government and the IMF. However, the question cannot be avoided any longer, not with the Budget round the corner.
There is still time for the government to be realistic, and go for the revenue it can raise, rather than set unrealistic targets everyone knows are destined to fail. The government should set rates and make conditions which make it possible to collect some revenue, than to set rates and make conditions which satisfy lenders, but which fail to raise revenue. Pakistan has always had the problem of failing to expand its tax base. Now, with the virus, what tax base it has, will shrink, as taxpayers refuse to pay taxes not because they have joined some taxpayers’ revolt, but because the pandemic has made their business go belly-up.
A major issue is not so much the revenue side, as the expenditure side. Much of the lack of preparedness for the pandemic was because of past misplaced priorities. However, the Budget coincides with the ratcheting up of tensions with India along the Line of Control, and of our ally China with India over Ladakh. Adequate provision must be made for defence, as for pandemic-related relief. The nation awaits the government’s answer with eagerness.
