No relief for masses in budget, admits Qamar

ISLAMABAD- Government on Thursday expressed its inability to avert passing on the impact of likely surge in the energy prices, particularly of oil and gas, in the near future to keep the fiscal balance intact, and announced that all forms of subsidies would be withdrawn in phases.   

Finance Minister Syed Naveed Qamar along with the economic team comprising Secretary Finance Farrukh Qayyum, Secretary General Revenue Division Abdullah Yousaf, Deputy Chairman Planning Commission, Secretary Information Ikram Shaheedi and other senior officials of various economic ministries at a post-budget press conference tried to clarify some "engineered" or "technical" anomalies in the federal budget for 2008-09.

When asked about the reduction in the amount of subsidies, the minister said they had rationalized the amount allocated for subsidies in the federal budget mainly due to tight fiscal position and availability of restricted fiscal space. "Subsidies will be withdrawn gradually," he added.

The government spent a huge amount of Rs 407 billion in the outgoing fiscal 2007-08 mainly on oil and food items, which witnessed an extraordinary rise in international markets and still is in upward swing. The subsidies' amount projected for next fiscal 2008-09 is Rs 295 billion with a major cut of 28 percent against the outgoing year.

To keep the projected fiscal deficit at 4.7 percent, some fiscal measures were initiated during the federal budget including freezing of non-development, non-salary expenditure, ban on purchase of physical assets by public organizations, reducing budget for Prime Minister Secretariat, National Assembly, Senate, budgetary cuts of National Accountability Bureau (NAB), phasing out of subsidies and limiting borrowing from the State Bank of Pakistan. The measure to restrict borrowing will not only curtail the deficit but also hope to contain the inflation.

The minister reaffirmed to stop Pervez Musharraf-led military government-style accountability and introduce the constitutional procedure for carrying out accountability. "The constitutional defined procedure will be implemented to make anyone involved in playing with the figures in the recent years," Naveed Qamar asserted.   

Responding to a question of non-mentioning of budgetary allocations for President House, the minister said, "President makes his own budget and any increase or decrease on the presidency's budget is his discretion."

Presidency, PM Secretariat, Supreme Court of Pakistan, Parliament House, Senate and National Assembly, and Election Commission of Pakistan are preparing their own budgets and any change in their allocations is up to their administrations, he clarified.