The budget debate

How to work within IMF parameters?

The budget debate has already begun albeit outside National Assembly with PML-N’s prebudget seminar followed by sparring between Sindh CM Murad Ali Shah and Federal Minister Asad Umar. With the government promising that there would be no new taxes, no price increase and no burden on anyone in the forthcoming budget, many would wait for the budget document with baited breath. The government’s claim that the GDP this year has risen to 3.9 pc has been challenged by the PML-N. One expects that the issue, along with many others, would be argued seriously this time through facts, figures and well-prepared analyses by speakers from the treasury benches and the opposition. Any recourse to point scoring and shouting matches would disappoint the common man.

It is yet to be seen how the PTI government reconciles the agreements signed with the IMF with promises made to the common man. One of the undertakings requires Pakistan to bring down budget deficit from 7.4 percent to 5 and half percent. Normally deficit tends to soar by the end of the financial year and the target to reduce it by one and a half per cent may not be achievable. Petrol prices continues to increase but the PM has promised not to pass it over to consumers. Similarly, he has rejected the proposal to raise the electricity tariff. How long can the government stand by its words? The FBR hopes to raise the tax collection to Rs4,700b. But the target agreed with the IMF in the Budget Strategy Paper is Rs 5,963 which can be achieved only by raising new taxes worth Rs 700-800 billion.

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The PM has agreed to provide development funds to KP and Punjab ruled by the PTI. There is a perception that this is meant to ensure the loyalty of the party lawmakers. Sindh government has meanwhile complained that it has been deprived of its share of development funds as the federal government is prejudiced against Sindh. Federal Minister Asad Umar has maintained that the Center would directly spend on Sindh development projects as the PPP government is likely to misuse the funds for personal gains. The federal government’s stand violates the spirit of provincial autonomy and is likely to encourage parochial tendencies.

Editorial
The Editorial Department of Pakistan Today can be contacted at: [email protected]

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