Budget estimate, facts and fiction

Minister for Finance and Revenue Muhammad Ishaq Dar on Friday unveiled the Rs14.46 trillion relief-oriented Federal Budget for the fiscal year 2023-24 with a real GDP growth target of 3.5 percent. While presenting the Federal Budget 2023-24 in the National Assembly, the finance minister declared that the incumbent government had set the direction of the economy on the right path, but it still faces challenges.

Minister claimed that the government had set a modest growth target and presented a responsible and balanced budget instead of a popular one. As said, the total expense estimate was set at Rs 14.46 trillion, out of which Rs 7.3 trillion would be spent on interest payments. The budget deficit was expected to remain at 6.54 percent and the primary balance would be a surplus of 0.4 percent to the gross domestic product (GDP). The tax collection target for the next fiscal year had been fixed at Rs 9.2 trillion, including a provincial share of Rs 5.276 trillion. The budget was okayed by the parliament amid nominal protest by a friendly opposition, while Prime Minister Shehbaz congratulated Finance Minister Dar for presenting a balanced and public-friendly budget amid the worst economic challenges and the global energy crisis.

The annual budget had always been a statistical puzzle and a mystery for a layman and the common public who were often betrayed by its leaders through flashy announcements and insignificant measures that neither improved peoples’ life nor strengthened the national economy. The recently tabled annual estimate 2023-24 was a traditional budget in customary situations and was another manifestation of leaders’ hypocrisy and economists’ incompetence that presumably raised expenses in each head by 15-20% and did not suggest measures to generate money except massive increase and a screen smoke alteration in taxation that only serve to create distraction and confusion in the masses.

Pakistan, a cash-strapped nation with empty national exchequer has tabled a so-called relief-oriented budget ahead of a crucial election in the country. The incumbent government failed to revive the $ 6.5 billion IFF program with the international monetary fund (IMF) and announced trashing the previous package to negotiate a new loan with the global leader in the next fiscal year. This was another blunder with the IMF on the part of Pakistan for the consecutive third time that Pakistani authorities stepped back from their commitment to the IMF and resorted to poisonous politically motivated measures that hurt a healing economy.

The government has announced unbelievable increases in the salary and pension of government employees, offered subsidies on oil and gas, announced a health cards scheme for journalists and artists, and introduced multiple other incentives for industry and agriculture that contradict the conditions imposed by the IMF and also do not correspond with the current economic conditions of the country that urgently needs to close $6 billion gap through responsible economic functioning and fiscal management. According to the sources, the IMF is utterly annoyed with Dar’s dogma particularly currency and Forex-related regulatory policies that cause negative impacts on the country’s economic outlook.

The government had missed all targets of revenue generation during the previous fiscal year while the current tax target is also unrealistic and unachievable for the government. Direct and indirect taxes had been increased on multiple accounts that would finally end up to the end users and will cause inflation. Several government departments faced fund shortages to pay salaries to their employees in recent months, thus how a cash-strapped nation would manage extra funds to feed its employees in the next year. The coalition government has allocated a bulk of funds under public sector development programs amid the worst economic condition that has no other use except political engineering and election management in the upcoming GE in the country.

There is a lot to deliberate on the economic estimate presented in the Parliament a day earlier. However, the majority of the decisions and actions proposed by the document are undoubtedly politically motivated and unrealistic aims at grabbing public support at the cost of the national economy. Currently, the country has to repay a total debt of $ 21.95 during the next fiscal year which is a real challenge in the absence of an IMF program while such an imaginary budget will further complicate the economic situation in the country. Earlier, the coalition government was accusing the PTI leaders of laying economic bombs/mines for the coalition government but what they are doing with themselves or their successors by presenting such a flimsy budget? Although, the current budget has multiple pros and cons, however, its negative impact would come during the tenure of the next caretaker setup or thereafter.