A flawed prescription

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According to media reports, the International Monetary Fund (IMF) is pressurising Pakistan to mobilise additional revenues worth Rs.

800 billion and the two sides are working out revised macroeconomic and fiscal framework, whereby the budget deficit and primary deficit are projected to escalate massively against the envisaged targets.

The IMF is asking Pakistan to fetch an additional 1 percent of GDP revenues, keeping in view shortfall on tax and non-tax revenues as well as hike in expenditure side.

The debt servicing has ballooned up to unprecedented levels, putting more pressure on fiscal fronts.

As information is based on a briefing given by relevant authorities to a select group of journalists, there are reasons to believe that this is an attempt to mentally prepare people for another mini budget.

Contrary to previous claims that FBR is successfully meeting revenue targets, it is now being said that the Bureau is facing a shortfall in the range of Rs400 to 500 billion rupees owing to import compression.

The non-tax revenue target will also be missed out as major revenue shortfall will be seen on account of achieving Petroleum Development Levy (PDL) of Rs855 billion.

The foreign exchange reserves are dwindling and remittances by Overseas Pakistanis have also come down, raising serious questions as to how the country would manage dollar inflows of upto 34 billion besides the money needed for reconstruction in the wake of devastating floods.

However, it is also a fact that people of Pakistan are already hard pressed because of an alarming increase in taxation, upward adjustment of prices of POL products and electricity tariff besides free fall of the rupee against dollar.

They can, therefore, absorb no more shocks and instead they are looking towards government for much-needed relief.

It is a daunting challenge but we are confident Finance Minister Ishaq Dar has the vision and ability to manage things as per expectations of the masses.

There should be no additional pressure on existing taxpayers in the name of resource mobilisation as we have been witnessing throughout in the past.

 

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