The 2023-2024 Federal Budget was expected to be one where it threw open its coffers, caution to the winds, and fulfilled requests from various interest groups and pro-government lobbies. At the same time, it was also expected to exercise the kind of fiscal caution that would keep the IMF happy enough for it to engage with it in one more review. It failed on both counts, The budget it presented has not attracted the voter, because it has not given enough relief. At the same time, it contains issues which have made it difficult to defend before the IMF. The local IMF representative, Ms Esther Ruiz Perez, went as far as to issue a press release detailing the various aspects of the budget which caused problems. First was a tax amnesty scheme, which she said was violative of an IMF conditionality, then it failed to broaden the tax base, and failed to address the power sector’s liquidity problem. The latter two have been virtually staples of the IMF’s concerns about the budget.
The IMF is not the only critic the government had to face. Its own ally, the PPP, has been critical of the budget as not being one that would allow it to go into the next election comfortably. The PPP had left the management of the economy to the PML(N), but has found that it has not delivered sufficiently to enable it to go to the hustings with any confidence. While PPP ministers have been loyal enough, its backbenchers have seen no reason to defend policies that may cost them their seat come polling day. The outburst against Budget by Nafisa Shah in the National Assembly’s Finance Committee provides just one example where the Shehbaz government finds itself exposed.
This is something the PML(N) has brought on itself. It is a coalition government formally, but apart from Finance, the PML(N) has also taken the Defence and Interior portfolios, leaving only Foreign Affairs to the PPP. If the coalition finds it is no shape for the next election, it is the PML(N) which suffered an excess of confidence, and proved not to have the men for the job it thought it did. The Finance portfolio is a prime example. The holder was brought in from exile, and widely touted as Mr Fixit, who would right the economy, but it now turns out he only had old solutions to new problems, and solutions which had not worked all that well the last time around.
