While the finance minister’s revelation of netting 700,000 tax evaders during the ongoing fiscal is appreciated, we will need to see visible, on ground improvement to overcome our mistrust of just such boasts. Back at budget time, and slightly earlier during our pre-budget seminar in Lahore, similar statements by Dr Sheikh led us to believe that this might really be Pakistan’s year of growth, that ambitious budget targets reflect proactive posturing by the government, that the finance ministry will turn a new leaf by finally checking unnecessary leakages and stimulating tax receipts to ease the centre’s fiscal space.
Yet there has been little to back tall claims, save the odd statement by the odd official, followed by the odd news-item the following day. The economy remains as it was, hemorrhaging billions annually due to official inefficiency with both tax and exports earnings unimpressive, not nearly enough to grow eight per cent of GDP in the medium term to absorb the furious 3.5 per cent growth in the labour force. Dr Sheikh also noted the undeniable centrality of the private sector with regard to putting the economy back on track. Yet his tenure at the finance ministry has not met with success on promised privatisation of sick public sector entities running the government into ruinous debt.
If what has been is any indication of what will be, then Dr Sheikh should expect few serious minded people to take his latest claims seriously. However, if the future is to be any different from the past, we will have to do exactly what Dr Sheikh has noted. There can be no other way. The government’s earning capacity needs serious upgradation, and for that a paradigm shift is needed in both tax receipts and trade earning. Failing that, we will remain aid dependant, forever jammed far below the production possibility frontier.