Nasim Ahmed


In essence, the national budget is no different from an ordinary household budget. Although much bigger in size and scale, it has the same objective: to strike a balance between income and expenditure.

On the one hand, you try to increase income and, on the other, you reduce unnecessary expenditure, eliminate waste and cut corners where possible.

This is how you ensure the economic stability of your household. The same principle applies to the national budget-making exercise.

There are certain do's you need and some don'ts you have to follow for rational budget making.

Judged against these criteria, how does the new federal budget fare? Does it do the needful? Or does it violate the standard rules of budget making? So, let us examine the document authored by Dr. Hafeez Sheikh and analyse it on the anvil of standard do's and dont's.

First, the do's that needed to be done, but have not been.

One of the first do's was to adopt measures to curb inflation and reduce high prices which have decimated household budgets across the land. But no price control mechanism has been announced. Instead, the budget includes steps that are bound to fuel more inflation and push prices even higher.

This is best illustrated in the total budgetary outlay of Rs. 2.9 trillion showing a deficit of Rs. 1.1 trillion.

This is a big gap which will be filled by borrowing from banks and printing more notes, unleashing a new tsunami of inflation in the country.
The government was also expected to reduce the burden of taxes on the common man. But the budget does just the reverse. It has slapped Rs. 63 billion worth of new taxes on the people which will lead to further increase in the prices of many items of daily use.

A progressive budget taxes the rich in order to help the poor. Wealth tax and higher income tax for the super rich are two universally accepted fiscal tools to transfer resources from the privileged to the less privileged sections of society. But not only has wealth tax not been revived but the wealthy have been allowed to invest in the stock market without any question being asked about the sources of their income.

Another do that the people expected from the budget was some relief in electricity, petrol and gas prices which have become unaffordable for the common people. But no relief has been announced and, instead, the budget contains a veiled threat of further hike in their prices, given the wasteful ways of the rulers.

Again, to the great disappointment of the general masses, the government has announced no measures to rein in the monster of load-shedding. Similarly, the budget outlines no steps to reduce the ballooning government spending best illustrated by the lavish Mughal style expenditure being incurred on the maintenance of the Presidency and the Prime Minister's House which on an average gobble up over Rs. 2 crore of tax payers money on a daily basis.
Attracting foreign investment is the need of the hour to inject a new life into the economy. But no special incentive have been devised for this purpose. Similarly, Pakistani expatriates, who send home a monthly average of one billion dollars to sustain the national economy, have been offered no encouragement to increase the flow.

Now, the dont's of budget making which the government has violated with impunity.

Instead of setting things right in the state enterprises which have become a bottomless pit of corruption, the government in the new budget has once again allocated to them a big chunk of the budget in the name of subsidy.
That means the Railways, PIA, PEPCO and other state enterprises will continue to be a burden on the national economy. Similarly, the government was expected not to allocate more funds to the Benazir Income Support Program and gradually roll it back because of massive corruption in its implementation. But ignoring all criticism, the government has set aside a hefty sum of Rs. 70 billion for the program.

Transport is a basic need of the people and it must remain within affordable limits. But in the new budget the government tax on the seating capacity of passenger buses and goods transport has been increased 400 per cent. And what is the justification for spending tax payers' money to provide lifetime security to the president and prime minister? As it is, they already enjoy maximum security and protocol facilities and there was no need to divert more of our scarce resources for this purpose.

As compared to other countries, the minions of the Pakistani state enjoy unparalleled discretionary powers and have access to secret funds for which no accounts are rendered. While hiding details of where and how the discretionary funds were spent, the budget document shows that the size of these funds has been growing to the detriment of the larger public interest.

If the prices of items of daily use like atta, sugar, cooking oil, petrol, electricity, gas etc. are any indication, living has become about four times more expensive in the last four years. The new budget threatens to add further to the woes of people in the coming year.

-Cuttingedge