In vibrant democracies, the annual budget is such an important event that it involves all segments of society. Lots of interest is generated and masses wait for the budget statement with enthusiasm, eyeing much awaited relief. Other stakeholders like industries and corporate sectors also try to influence budget makers by highlighting their needs during the preparatory process.
But not much happened here. At least nothing happened before the budgets (federal as well as provincials) were presented. Generally speaking, nobody waits for the annual economic survey or the budget speech itself. It looks as though the federal budget has been reduced to just another official exercise, devoid of substance. It neither discusses any long-term development programs nor ensures any immediate respite to the commoners.
People are not interested in the budget because the exercise is not actually meant for them. Its usual significance has been lost over the last few years because of deregulation and privatisation that de-links utility prices (natural gas, electricity, oil, telecom, commodities, etc) from the federal budget. These prices are fixed separately on quarterly, monthly and even fortnightly basis. We come to know when a vendor selling lady fringes (bhindi) says vegetable prices have shot up because prices of petrol have increased or when meat sellers charge more on account of increase in the cost of iron ore. What have prices of petrol or iron ore got to do with lady fingers or meat, one wonders?
Common citizens are not interested in terms like GDP, GNP, fiscal deficit and debt servicing, or even rising levels of foreign exchange and favourable promises by ‘friends of Pakistan’ and international financial institutions like the IMF and the Word Bank. What good are these figures if prices of utilities and commodities skyrocket after every budget?
It is in this context that common people view conflicting messages, new hopes, and more promises that start pouring in from Islamabad before budget every year. Everyone in power gives good news about pay increase of government employees, relief for common man, reduction in different tariffs, repealing of surcharges, adjustments in tax rates, etc, while the populace keeps struggling under an ever increasing burden of living costs.
Another reason for lack of general interest in budget proposals is that like most legislation and legal notifications, budget proposals are poorly written, ambiguous, complex and full of loopholes that few can decipher. The situation is not helped by technocrats-turned-politicians who purposely over-complicate the budget declaration in an attempt to obscure the true implication and impact of measures being announced.
That said, let us review the national economy. Pakistan is an impoverished and underdeveloped country, suffering from extensive terrorism, low levels of foreign investment and above all, very costly governance. Pakistan’s economic prospects, although still marred by poor human development indicators, continue to improve mainly due to inflows of foreign assistance. Foreign exchange reserves have also shown growth due to increase in recorded workers’ remittances. However, long-term prospects remain uncertain as development spending is low and political tensions weaken commitment to lender recommended economic reforms.
This time, instead of trying to predict and analyse realities, I took a chance to see how people make their personal budgets. Or do they, in the first place? I asked people from different segments of our multi-classed society to account for their monthly income and spending. All the accounts were very revealing. It quickly became clear that the general public has little interest in the budget because it is not touched by it. People cannot be expected to appreciate government initiatives that don’t translate into a better standard of living for them. Especially now, when high inflation and shrinking job opportunities have frustrated the general public, the government needs to go the extra mile to ensure that people not only understand what it is doing regarding the economic situation, but also see a clear difference in their lives.
The writer is Deputy Controller Examination, Lahore School of Economics