The last budget of this regime has been finally unveiled. At one place, this election year budget has something to offer to everyone, like tax breaks to salaried and business classes, increase in salaries and pensions of government employees, jobs for young people, reduction of federal excise duty on cement, tariff rates of custom duties and so on. On the other hand, it has nothing to address structural weaknesses. Financial managers have lost the willpower to bring the economy to a growth-oriented track. They have been consistently backtracking on steps necessary for economic stabilisation, i.e. broadening of the tax net, evolving a business-friendly environment and cutting expenditures.
Meanwhile, the substantial increase in revenue target up to Rs 400 billion signifies the hollow claims of budget makers and once again proves that they no longer believe in cutting the coat according to the cloth. Mere highlighting of 700,000 potential people will not bring them under the tax net in the prevailing conditions, where the incompetence and ineffectiveness of the tax authorities is a fact that is hidden from no one. If the government was determined to provide material relief to its voters, it should have rather taken steps to control devaluation of the currency, rising inflation rate, peaking power demand, removing taxes on medicines, facilitating investors and providing soft loans to youths for education and business. However, it presents grim prospects for its voters. The finance minister puts the entire blame on the NFC Award for financial constraints faced by the federal government that restricts its spending on the social sector.
However, even a cursory look at the budget figures seriously negates the minister’s claim. This financial year marks a record increase in expenditure on the maintenance of the President’s House and on foreign trips.
Similarly, high ups are also privileged with allocation of billions of rupees in the name of discretionary and secret funds. On the final day, nobody will surely come to know where these funds were utilised. Will they be spent on upcoming election campaigns or personal gains or welfare of the masses, the questions remain unanswered. Should such secret funds find any place in a country that is mired in huge public debt, financial constraints, and flight of local and foreign investment?
These expenditures, inevitably, defeat the wisdom of transparency and accountability. If some sanity still prevails, the financial minister can easily save many billions of rupees for uplifting and reforming the social conditions of the masses.
Moreover, COAS General Kayani has expressed his dismay on several occasions on the state of social conditions in the country. Perceiving his concerns expectedly, the three services chiefs would restrain the budget-makers from increasing the defence expenditures, if not reducing them or allowing them to shift their pensioners to the defence net. That would have passed the benefit of about Rs 40 to 50 billion to the underprivileged and malnourished people of this country. However, the budget has proved to be quite traditional. There is no innovative and bold initiative. The fiscal deficit is likely to exceed eight percent because of ambitious expenditure and revenue targets, and, in the prevailing conditions, no aid or loan is expected to fill the huge vacuum. As a result, the shortfall will be promptly recovered from the development sector at the expense of the people.
MUHAMMAD AZAM SHAIKH
Advocate & General Secretary,
Tax Bar Association, Larkana.