Budget for the sake of budget
“Ishaq Dar has been busy in defending the first family for their involvement in the Panama leaks. The issue of TOR’s has hijacked the national political scene for more than a month now while the government’s stalling policy in this regard has only frustrated the opposition which in result, has further pushed the issue, hence keeping it alive as a policy level debate.”
The federal government has presented a mammoth budget of about 4.5 trillion rupees. The 2016-17 fiscal years’ budget has come at a time when the PML-N led federal government is consumed in crisis.
Last year’s economic progress has been dismal: by and large, majority of the targets set for sectors which make the core of the Pakistani economy, were missed. Agriculture remained one of the worst effected sectors which add to more than 21% of Pakistan’s economy. Production of traditional crops such as wheat and rice could not surpass last year’s cultivation percentage. The government’s superficial subsidies offered to the agriculture sector a few months ago have hardly solved the small farmer’s problems. Farmer associations have been protesting against the rising prices of fertilisers and uncontrolled middle men set crop prices which are always at the farmer’s cost.
Last week, farmers protested outside the Punjab provincial assembly against the government’s set prices of different crops, which are not even enough to meet the necessary expenditures let alone to earn the profit. The protest later became politicised with lawmakers from different political parties’ weighed in to add to the discriminative rhetoric which the PML-N traditionally has been blamed for against the agriculture sector in favour of industry.
While the indicators of growth in the industrial were encouraging, it doesn’t reflect a rosy picture in reality. Industry in Pakistan has been under stress from the last many years. More competitive regional markets in terms of prices, security, policy and investment in this sector have left Pakistan far behind. Bangladesh has almost taken away the garment sector from Pakistan with majority of the firms setting up their plants in the country.
Moreover, Pakistan has not added any significant product in its export list besides the traditional portfolio of agriculture sector which is also likely to suffer in the current year as Pakistan could not even meet the last year’s production targets. Consequently, this has added further to the farmer’s plight.
Last year’s national growth target of 5.5% was missed by large proportions; Pakistan could hardly reach 4.7%. Ironically, the finance minister, Ishaq Dar, blamed the agriculture sector for failing to reach the set growth target despite the fact that his government’s focus has not moved beyond the IMF dictated heavy taxes and shaky reforms in the development sector.
Regionally, Pakistan is far behind than its neighbouring states: India’s unprecedented last year’s growth rate of 7.9% has been highest in the world. While the Chinese growth is expected to decrease in the current fiscal year, India is set to maintain its target rate which – among others – has largely been the result of the BJP government’s policy of supporting the collapsing agriculture sector in the country.
The China Pakistan Economic Corridor (CPEC)’s construction and improved security situation in the country, has relatively resumed the trust of international investors. Infect, both of the aforementioned reasons were hardly the result of Nawaz’s Sharif led federal government’s policy. First, the CPEC’s development is due to the fast changing geopolitical environment which geographically places Pakistan in Chinese larger “one belt, one road” project. The project, however, could have gone to any other country in the region if the new era of “silk road” had its traces somewhere else in the region. Second, the overall improved security situation is due to the military’s counter terrorism operations all across the country.
“Last year’s national growth target of 5.5% was missed by large proportions; Pakistan could hardly reach 4.7%. Ironically, the finance minister, Ishaq Dar, blamed the agriculture sector for failing to reach the set growth target despite the fact that his government’s focus has not moved beyond the IMF dictated heavy taxes and shaky reforms in the development sector.”
The Panama leaks saga has been a blessing in disguise for the government. The opposition has hardly had any time to debate the budget on its true merits. All rhetoric has been whether the finance minister can present the budget in Prime Minister’s absence or not.
In order to diffuse some pressure from the opposition, the government on the other hand, has promised to address all neglected major sectors, including the agriculture. The government’s latest rhetoric of uplifting the agriculture sector is only here to stay as long as the budget speech: the federal government doesn’t have necessary funds to invest in massive scale to save the collapsing farming sector.
Ishaq Dar has been busy in defending the first family for their involvement in the Panama leaks. The issue of TOR’s has hijacked the national political scene for more than a month now while the government’s stalling policy in this regard has only frustrated the opposition which in result, has further pushed the issue, hence keeping it alive as a policy level debate.
Besides all of these problems, more essential issues were missed in the budget including the question: how does the government plans to create the necessary jobs whose number now has risen to 1.5 million per year?
The budget was only presented for the sake of budget. The current government’s policy of prioritising one sector at the cost of other would invariably fail in achieving the desired growth targets. If the PML – N’s government wants to achieve its set growth targets or to surpass them perhaps, it needs to follow a balanced policy of supporting all sectors equally.
