Dar and the people
By M Saeed Khalid

If you perceive that there are four possible ways in which something can go wrong, and circumvent these, then a fifth way, unprepared for, will promptly develop. — Murphy’s Law No.4

The first of a maximum of 60 months of Nawaz Sharif’s third premiership is about to be completed. Contrary to Musharraf’s favourite jibes at the ‘sham democracy’, the system has delivered a peaceful transition. The people who voted Nawaz Sharif to power in the centre in May were neither expecting miracles nor any spectacular results from a change of government. They opted for a change they could figure out rather than the fury and thunder of the great Khan.

PML-N supporters as well as those who did not vote for Sharif are, nonetheless, entitled to have some clue as to where the government is headed in terms of domestic and foreign policy objectives.

But first, the good news. The people are still looking around incredulously to make sure that a formidable bunch of plutocrats has actually left the scene. No federal government in the nation’s history stole as much with as straight a face as the team finally seen off in March, leaving behind trillions of banknotes and mountains of debt. The second piece of good news is that the PML-N government has imposed cuts in wasteful spending. This is in contrast to their earlier tradition of enjoying a regal lifestyle at public expense.

Of course, the bad news is not far behind, following Murphy’s first law, ‘if anything can go wrong, it will’. The budget blues started with one percent increase in the GST, followed by a two percent raise in petrol prices, doubling of taxes on mobile phone calls and an even higher increase in the price of CNG. The latest joke about governance making the rounds in Islamabad goes like this. Question: what is the difference between the PPP and the PML-N regimes? Answer: the former robbed without giving a receipt.

It was abundantly clear by the morning of July 1 that the government is capable of taxing only consumption as all ideas of direct taxes have been put on the backburner. Even while taxing consumption, the state seems to have abandoned any pretence of applying across-the-board revised GST. Selective GST is the nearest we have been able to get to value-added-tax (VAT). Most countries using VAT as a major source of income have crossed the threshold of 17 percent.

Considering that more than half a dozen governments before the new one, failed to impose VAT or RGST due to strong resistance from the trader-merchant lobby, there is no alternative left to the government other than raising the GST. Though it will be higher than India (14.5) and Bangladesh (15), it is still lower than Turkey (18 percent).

Dar forthrightly admitted that he could forgo the GST increase if those rejecting the raise could persuade the defence establishment to make an equivalent cut in their budget. Seriously, it is for the government to engage the defence services to sit down for across-the-board cuts in their budgets, particularly intelligence spending. These cuts should be commensurate with, and not higher than, cuts in the civilian budget.

The prime minister can set a small personal example of defence cuts by relieving the team of military officers serving as his personal staff. Ever heard of a military secretary and a posse of ADCs for an elected prime minister other than in Pakistan? This practice started in 1973, when ZA Bhutto gave up the post of president but insisted that he should be able to continue to enjoy the same pomp and protocol as prime minister.

If our finance czar is serious about a more comprehensive tax system for the future, he needs to move on to ensure that the largest groups of potential taxpayers are brought under the net. A successful liberal professional or trader is loath to getting his name on the tax roster. Well Mr Finance Minister, this is your chance to defy Murphy’s cold logic and make sure that your name is not added to the list of failed economic managers of this country.

On other fronts, the government’s resolve to tackle the energy crisis should help reduce people’s misey and a near collapse of the productive sectors. Progress on the twin monsters of terrorism and other killing sprees is yet to be seen. It is astonishing that the prime minister has not come out with a leader-like position on the renewed wave of terror attacks by the TTP and its allied lashkars.

The government’s public denunciation of drone attacks also makes one question whether its declaratory stance is not somewhat stronger than its operational policy.

Email: saeed.saeedk@gmail.com