The government’s coalition partners walked out of the meeting of the National Assembly’s Standing Committee on Finance on Wednesday complaining that officials were not ready to share the details of the next fiscal year’s budget with them. Bushra Gohar of the ANP told reporters that officials of the Finance Ministry were not ready to share anything with the members, no documents were provided to them, and an academic debate was pursued in which they had no interest. The budget for the next fiscal year had been finalised on the diktat of international financial institutions and bureaucrats have already approved it. “There is no role of parliament in the budget formation, constitutionally it has to approve it,” she added. She said the members wanted to know about the status of their recommendations whether they were accommodated in the budget, as many were too important to be ignored such as the limit on the defence allocation and provision of money from the PSDP for army-related projects like the K-9 project.
Another MNA of a coalition party said the session was drab and he too left it as the officials were not ready to share anything arguing that sharing information would amount to disclosing the budget before its announcement. Asked what suggestions were made for broadening taxes, he said they demanded that the pampered sectors be taxed. About the increase in salaries, he said, the government was under pressure after employees staged demonstrations and it was considering some enhancement. However, he said, no details were shared with them. Qamar Zaman Kaira of the PPP said the committee was briefed on the budget for the next fiscal year and they were not briefed on the taxation part which would be announced in parliament.
According to a copy of the report on the state of the national economy provided to the committee, the government conceded bad news on growth, jobs, inflation and its borrowing to finance the budget deficit. The Consumer Price Index based inflation is close to 14 percent which is very high. However, it says despite pressures, Pakistan Rupee is stable and is around Rs 85 – 86 per $1. The government had to borrow considerably to invest in defence, public services, infrastructure projects, dams, and electricity generation during the current fiscal year. The government is aggressive about its taxation policy but allies did not agree with it on the implementation of reformed general sales tax (RGST).
The report says the government would transfer around Rs 1.050 trillion this year while next year Rs 1.275 trillion will be transferred to the provinces. This year the federal government will pay around Rs 730 billion as interest on the debt while next year it will increase to Rs 790 billion. The budget deficit target for next year will be around 4 percent of the GDP.