What numbers don’t tell
It was somewhat strange to see the finance minister so surprised during his post budget press conference the other day. Surely the press would question the budget’s obvious pro-business tilt, not the least when the ‘business lobby’ is the prime minister’s core constituency. Perhaps he expected the press, too, to take his long speech at face value.
No doubt the economy has grown more than the PPP years. And yes, the fiscal deficit has been pulled back a good three percentage points. Inflation, too, is down to single digits, something the finance minister has long held as one of his main priorities, maybe rightly so.
But there are aspects of the economy that numbers cannot address adequately, and it was this understanding that seemed missing not only from the budget document, but also from the minister’s detailed speech. So far as the common public is concerned, the increased growth rate, the squeezed deficit, even the billion-and-a-half (dollars) extra parked in central bank vaults that have stabilised the rupee, mean practically nothing because their living standards have not registered any visible improvement.
Now, nobody, not even common people, expect the budget to act as a lever that can suddenly turn things around. But by now most people do understand the kind of policy direction it presents. And when the finance minister speaks at length about the core needs of the economy – tax revenue, export enhancement, price control, etc – but then uses the extra fiscal space for mega projects, motorways, power plants, the charge that he might have missed what our economy needs presently is not entirely without merit. That is so especially when the document is littered with tax breaks and incentives for the corporate business elite.
To be fair, the minister’s constraints must also be understood. Since going to the Fund (typically) soon after coming to power, the government traded off a lot of its budgetary autonomy. And while whether or not it would have acted differently otherwise is debatable, it must be understood that deficit and growth directives now come from the IMF, and naturally the development budget takes a cut in favour of structural adjustment. But relying too much on the trickle down has its downside, as we have repeatedly seen. And in relying purely on investment incentives to spearhead growth, while making little or no provisions for sectors that ultimately reshape the economy, the path to 6-7 per cent GDP growth will be very, very difficult.
More than mega projects and motorways, the economy needs expansion in the human resource, production, exports, and revenue collection base. And so long as these do not get the sitting government’s undivided attention, promises will remain just promises, unable to be translated into reality.
I am very disappointed in these criticism from the media! VERY disappointed! Our nation was literally in a do or die situation and Ishaq Dar himself said the International community thought Pakistan would have defaulted by June 2014 when Nawaz Sharif took over. So you can't get a pro-poor, pro-bussiness and pro-development budget, espcially not at this state to top it all up, EVERY knows PML-N is pro-corporate so you're not meant to expect a pro-poor budget and nor were the voters. Pro-poor budgets are for countries which haven't been run into economic abyss by former governments. If anything you guys should shame PPP for their misdeeds they commited during their 5 year tenure.
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