PEOPLE are already crying foul and enraged over the sky rocketing prices of essential commodities and the announcements made by Adviser on Finance Shaukat Tarin at a news conference on Monday may help the government to revive the IMF loan program but will trigger another wave of inflation in the country, which will only add to the woes of common man.
It has been committed on the part of the government to introduce a supplementary budget as part of an agreement with the IMF for a net fiscal adjustment of almost Rs 550 billion during the remaining part of the current fiscal year through a twenty-two per cent cut in development funds, about Rs 300 billion rupees increase in tax target and a Rs 4 per litre monthly hike in petroleum levy on different petroleum products.
Petroleum prices are already going beyond the reach of common man and the proposed increase will only further shoot up the transportation cost which will have an impact on the prices of commodities.
Similarly, cutting the development budget will send a wrong signal to the private sector and the investors.
At the time of the announcement of the current fiscal year budget, the government had made the commitment to focus on development during the current fiscal year to foster productivity in an economy crippled by the breakout of Covid-19 and provide job opportunities to the people.
The plan by Shaukat Tarin was to reverse his predecessor’s decision to lower spending to narrow the budget deficit. However, it appears that on the IMF dictation, the government is reverting back to check deficits.
Until and unless, we will spend on development projects, our economy will not move forward and it will also be hard for the people to cope with the inflation.
Hence, we will suggest the government to review these very pro-inflationary measures for the sake of the people and find some other way to meet the deficit.
Enhancing the tax collection target by removing exemptions is a good thing which also indicates that the FBR is on the right course. If the revenue collection is increasing, no cut should be made on the development budget.
