ISLAMABAD - As the coalition government considers calling elections later this year, an ‘election budget’ has
been unveiled ostensibly to appease the general public crushed under unprecedented inflation.
Feeling the pulse of the general public, the government announced a 35 percent ad hoc relief allowance for the federal government employees of scale one to 16 and 30 percent ad hoc relief to the employees of scale 17 and above. The pensions have also been increased by 17.50 percent. The minimum wage was raised to Rs 32000 from Rs 25000. Although the people were expecting up to 50percent raise in salaries amid the worst price hike, the 30-35percent raise too, was not an easy decision for the government due to the persistent economic crises. In addition, Finance Minister Ishaq Dar also said no new tax was being enforced.
The government has been awaiting a green signal from the International Monetary Fund (IMF) for a fairly long time now. They are now optimistic to get the funds this month. The optimism however, has been there since the government took over in April last year with little good news to share. The IMF deal has been haunting the coalition government with fears of default. Before presenting the budget, the government ministers had been claiming of other options if the IMF deal is not finalised in the coming weeks. IMF still remains a preference.
Reports said the government will need to satisfy the IMF to have any chance of securing the release of more bailout money. The risk of default on sovereign debt is rising, with the economy creaking under twin deficits and record high inflation, which has further dented the popularity of Prime Minister Shehbaz Sharif’s coalition ahead of the vote.