No Clear Di­rec­tion

Southasia - - Comment - Syed Jawaid Iqbal

In an­nounc­ing Pak­istan’s much-trum­peted fifth fed­eral bud­get, has the gov­ern­ment of Prime Min­is­ter Yousuf Raza Gi­lani moved for­ward or back­wards is a ques­tion that many peo­ple are ask­ing. In nor­mal cir­cum­stances, the bud­get of a demo­cratic gov­ern­ment in its con­clud­ing year in power should have been one of tri­umphs and suc­cesses, of thresh­olds crossed and tar­gets achieved. In the con­text of Pak­istan’s bud­get for 2012-13, how­ever, there are more apolo­gies than achieve­ments. It is a bud­get en­com­pass­ing di­verse di­rec­tions in at­tain­ment or oth­er­wise of goals and tar­gets in the ar­eas of en­ergy, so­cial ser­vices, se­cu­rity and over­all growth. Many have de­scribed the bud­get as largely a rud­der­less doc­u­ment. The gov­ern­ment seems to have un­der­es­ti­mated ex­pen­di­tures and over­es­ti­mated rev­enues, per­haps obliv­i­ous of the fact that all this num­bers-flaunt­ing would need to un­dergo a painful re­vi­sion when re­al­ity sets in.

The coun­try’s econ­omy has been be­sieged for the past few years by the power cri­sis though, as claimed by the Fi­nance Min­is­ter, sub­si­dies worth Rs. 1,250 bil­lion have been pro­vided to the power sec­tor over the last five years. The gov­ern­ment is said to be un­der­tak­ing re­forms to set the sys­tem right, but these are painful re­forms and can­not be im­ple­mented overnight. Fur­ther­more, for a prob­lem that made its ap­pear­ance in the mid­dle of the last decade, it is un­for­tu­nate that no mean­ing­ful plan­ning has been un­der­taken so far and no con­crete steps im­ple­mented to catch the bull by its horns. It is not clear what the gov­ern­ment’s way for­ward is on this. All that there has been in ev­i­dence is a lot of fuzzi­ness while peo­ple have been lit­er­ally kept in the dark.

There is ob­vi­ously a lot of po­lit­i­cal ex­pe­di­ency rid­ing the tax­a­tion pro­pos­als in the new bud­get an­nounced by the Pak­istan gov­ern­ment, wherein tax rates have been low­ered for some and raised for oth­ers. The gov­ern­ment pro­poses to raise ad­di­tional taxes worth Rs.63 bil­lion, in­clud­ing sales tax and fed­eral ex­cise duty of Rs.29 bil­lion though it does re­al­ize that this will fuel in­fla­tion, much to the detri­ment of the poor. The busi­ness class has been spared new tax­a­tion and has also been ex­tended a re­lief of Rs.2 bil­lion in cus­toms du­ties on a wide range of items. A lu­cra­tive pack­age has also been in­tro­duced for in­vestors in the share mar­ket through whiten­ing of black money. And de­spite the fact that new tax mea­sures worth Rs.34 bil­lion form a part of the bud­get, these are sought to be raised from sec­tors where the tax ma­chin­ery is likely to face a tough time col­lect­ing rev­enues. Vot­ers are cer­tainly be­ing wooed in this elec­tion year, es­pe­cially the salaried class and pen­sion­ers, and have been given a re­lief of Rs.24.5 bil­lion in in­come tax and Rs.5.5 bil­lion in sales tax.

Bud­gets come and go but it is again ev­i­dent that the gov­ern­ment in power in Pak­istan does not seem to be in­tent on tack­ling deep-set eco­nomic prob­lems. From power sec­tor re­forms to rais­ing the tax-to-GDP ra­tio, there seems to be a lack of ap­pli­ca­tion at the gov­ern­ment end to find work­able so­lu­tions. The saga of mis­man­age­ment and mis­gov­er­nance con­tin­ues while the pres­sure on the econ­omy in­creases.

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