The heated budget debate of 2011-12 was anticipated, the opposition had to respond, but is this a clear chance for the opposition to win over the general public by protesting against inflation and lawlessness? Let’s not forget that election year is near and the opposition was bound to squeeze whatever it could from the budget.
Babar Awan clearly stated that this budget is accepted by industrialists and businessmen of Pakistan, and that this is, under the circumstances, the best budget that the government could come up with.
The government has increased the tax collection target to Rs1,952 billion, which seems like an un-achievable figure. FBR chairman Salman Siddiq himself agreed that most economists consider the target a bit optimistic, but stressed the government’s resolve to meet it with all possible means.
Along with the tax collection target, the government has also increased its gross revenue receipts expectation to more than Rs2,700 billion. What special ways and means it will resort to remains to be disclosed.
This year the government has increased the authority and power of the provinces. Whether or not this decision is more feasible politically or financially is not yet clear. With more authority vested in them, it is up to the provinces to merit increased autonomy.
The sooner they make visible progress on issues like agriculture tax – vital measures urgently needed for increased revenue – the better for public perception and the national kitty.
Largely, political considerations have drawn public anger. The government has raised numerous allotments, and in the absence of clear ways of achieving them, the common perception persists that eventually the working class will continue to be squeezed.
Instead of detailing economic steps to sustained growth, there is GST reduction, increase in taxable income threshold and higher salaries and pensions for government employees.
In clear words, economists state that despite no major taxes being added and a one per cent reduction in GST, slash in subsidies will hit Pakistan real hard. Electricity and gas tariffs, along with increase in POL product prices, will affect everyone from top industrialists to small traders. Former finance minister Dr Salman Shah, along with other economists, complained that still not much has been said about the completion and building of dams in the country, as the energy crisis is by far the biggest issue eating up the national exchequer.
Again, due to the political considerations, nothing has been said about privatisation and public-private partnerships, something that even a country like Korea has focused on, and excelled.
Development expenditure is the key to any country’s success, and this year PSDP has been kept at 3.5 per cent of GDP, which is less that what it was in 2006-07. The fiscal deficit has to be brought down to four per cent, and the government seems adamant on doing it, but what they don’t realise is that unless they don’t cut down on the size of their cabinet ministries and decrease their expenses, the issue of fiscal deficit will remain.
The man on the street does not care much about the new budget. He waits for a time when the government will finally be willing to shift its focus from politically opportune considerations to general welfare.
And as the debate over the new budget continues, with the government claiming prudence and the opposition crying incompetence, people will continue to wonder when their genuine concerns will be addressed. So far, there is little light at the end of the tunnel.
The writer is a financial journalist and business researcher associated with Arora Broadcast Services Ltd
