After enduring five long years of loadshedding, price hikes and loot and plunder under the PPP-led government, the people hoped that a political change would reduce their miseries. They dreamt of better conditions; of some ease in their sustenance levels; dreams of seeing food items at affordable prices and, perhaps, a gradual drop in the electricity outages. Hence, they voted in the PML-N in overwhelming majority in the centre where policies are made and executed. The first budget, however, announced by those who rode to success on people-friendly slogans has shattered their dreams.
The Finance Minister had declared in unambiguous terms that the budget will be harsh and will contain some drastic measures, but one hoped that it will increase the burden on the affluent section of the society. During the electioneering campaigns, the leaders too spun dreams that hinted towards these measures. Alas! That was not to be.
A day before the budget announcement, the Finance Minister presented the country’s economic survey and it was dismal to put it mildly. According to it, Pakistan had missed all economic targets; public debt stood at a staggering amount of Rs 13.626 trillion and was expected to rise to Rs14 trillion by June 30, 2013.
The debt quagmire that Pakistan finds itself in is an unexplained marvel; successive governments have been taking the country down this path with no let-up in sight. The people were told that there is domestic debt, foreign debt, circular debt and public debt that the country owes to various organisations, banks, countries and other creditors. No one, however, told them how this debt burden could be reduced or paid off.
Reportedly, the Finance Minister said that he will go to the IMF for further loans; “no harm in seeking fresh loans to pay off old ones” is the approach that he proposed. It implies that Pakistan will perpetually be under debt with no end in sight.
Also, the financial dispensation does not include any solid approach that can lay down a gradual reduction in debt culminating into absolute payback. It shows that either it does not have the economic capacity or are too ignorant of financial planning to adopt policies and measures that can work towards debt reduction. Since economic development in Pakistan is significantly stagnant, any hope of debt reduction is a dream. Even the current budget depends on bank borrowings.
Further, according to some economic analysts, the tax measures announced in the budget affect the common man more adversely than the affluent segment of the society. The GST on sugar, oil, ghee and milk will make these items of daily use go out of the reach of an ordinary person with limited or no resources at his disposal. In the previous government, media reports about suicides and people selling their children due to poverty were common. For such people, the PML-N government too has not introduced any significant change; it seems that their plight will remain the same.
In addition, abolishing taxes and duties on hybrid vehicles and reducing duties on imports of cars is not going to help the common man; those who can afford cars and motors can pay the taxes. Relief should have been given to those who find it hard even to survive. Taxing the items of daily use and giving relief to the rich is a cruel joke that the PML-N government has played on the people, who voted them in.
One major sector that could have generated significant revenue for the government has gone untouched again. The government despite slogans of change has not brought the agriculturists or farm incomes in the tax net. Indeed, it is not a failure, but a deliberate act of omission. A large component of national wealth thus remains outside the tax net.
Pakistan is passing through difficult times, both financially and economically. Difficult times need difficult and hard decisions. The PML-N leadership was well aware of the present mess. One expected not routine, but drastic measures from it; the focus should have been on reducing expenditures and allocating resources to increase revenue generation.
Some measures that it could have introduced are briefly indicated. Besides taxing farm incomes, its priority should have been to increase the energy resource and allocating it to the production sector. That needs to prioritise the allocation of gas and electricity. In India, according to the World Bank, 306.2 million people do not have electricity.
According to my findings, New Delhi has deliberately taken this step. This energy is diverted to the industrial sector; with economic improvement, the conditions will improve gradually. Can the Pakistani leadership too take such a bold decision?
We should educate the masses in this regard and enhance industrial production by diverting major share of electricity and gas. We already are living without these for long hours. Needless to say, Wapda has turned into a white elephant; however, can it be dismantled and in its place electricity generation, distribution and billing entrusted to the private sector controlled through Security and Exchange Commission? If so, this will bring a major sector under corporate tax net.
The first budget has shattered the dreams and hopes that the leaders had spun for mass consumption. We are going to live under the spectre of deficits and loans for a considerable time to come. The designs of the rulers will not change in the foreseeable future. This budget is not people-friendly and has proved that the next five years will not be any better.
The writer is a retired brigadier.