Glimpse of budget


PRIME Minister Nawaz Sharif address to the Federal Cabinet, which met in Islamabad on Thursday to consider one point agenda of Budget Strategy Paper, provides a glimpse of the forthcoming federal budget. The PM said the focus of next year’s budget would be on achieving higher, sustainable and inclusive growth. He said the government is determined to increase investments in both human and physical infrastructure and therefore, highest priority would be accorded to increase in development budget and poverty reduction.
The budget for the next financial year, to be presented in the National Assembly on May 26, is going to be the last budget of present government before general election. Therefore, all eyes are set on the budgetary proposals and how these would impact common man. Targeting six percent growth would mean increased developmental expenditure, which would be in line with the on-going policy of the PML (N) government to create, improve and expand country’s infrastructure and resolve the chronic problem of electricity load-shedding, which is going to become a big election issue if not tackled to the satisfaction of masses. As most of the projects are scheduled to complete next year, therefore, a big chunk of developmental allocations would obviously go for them, leaving not much for new projects. The Prime Minister has pointed out that time has come for the nation to reap the benefits of economic policies of the government which mean benefits should trickle down to people. No doubt, massive investment in developmental activities have created economic opportunities besides easing many of the people’s problems but it is also to be noted that the focus has been on major projects and programmes whereas much needs to be done at gross-roots level. Therefore, strategy during the last year of governance should be to allocate maximum resources for local government institutions so that day-to-day problems of the people are resolved. With prices of POL products going up in international market and consequently in Pakistan as well, there is a clear surge in inflation. In addition, some unscrupulous elements are also causing artificial price-hike like cigarette manufacturers, ghee and edible oil companies, and companies supplying dairy items that have raised prices of their products ahead of the budget. There are also reports that government intends to jack up rates of import duty for a number of goods in the face of yawning gap between exports and imports that has taken trade deficit to monumental levels. Government would be justified in raising the duty but this would also mean increase in prices of many items domestically produced on the basis of imported raw material and would also make exports non-competitive. We hope that import duty would be increased only on luxury items but exempting most commonly used gadgets like mobile phones, computers and their accessories. For some time, when Pakistan Government and some foreign countries focused on illegal transfer of money, Pakistan witnessed phenomenal increase in remittances but these have now started declining and there are reports that more and more people are resorting to Hundi. The Prime Minister has directed for preparation of an incentive package to encourage overseas Pakistanis to send money back home through banking channels. Despite repeated claims, banks have miserably failed to compete with Hundi in terms of monetary benefits and speed of delivery and hopefully this aspect would be taken care of. Resolve of the Cabinet to provide incentives to farming community is welcome as agriculture is the backbone of our economy. However, in the past such benefits were exploited by big landlords and that too at the cost of common man in the shape of hike in prices of agricultural commodities and this should not be repeated. Instead of resorting to increasing the support price, the focus should be on lowering the cost of inputs and modernisation of agriculture sector. And finally, the Cabinet spoke loudly about provision of incentives for some particular sectors or privileged classes, there was no mention as to what relief the common man would get in the budget. Expectations of people are high as during the last four years, the PML (N) government disappointed various segments of the population especially fixed income groups, who were provided bare minimum relief in the face of hike in prices of different items of daily use and services. Had it not been for the substantial relief provided to the salaried class during PPP government, government servants would have been severely hit by rising inflation, price hike and therefore they should be given meaningful relief.