Budget 2020, jugglery of figures

Another traditional IMF dictated budget

Budget 2020-21 like the past budgets is a mere jugglery of figures that attempted to cover up poor finances and flawed policies.It is a typical and traditional IMF dictated budget like many in the past. Any government under an IMF programme has very limited room to maneuver. IMF officials participate fully in the preparation of the budget. Every major policy decision and measure need the consent of IMF.

The budget had been prepared without any serious intent to address several grave issues in the country from negative GDP growth to the decline in large scale manufacturing and rising unemployment. There is no clear strategy and policy measures outlined to spur growth and to generate employment. The economic revival is the number one issue at the moment. This budget might not help to revive the economy and pick up the growth in big way.

The ordinary people have no interest in the juggerly of figures and technical aspects of budget. They wanted to know that how the government is going to reduce the inflation and increase their incomes. This budget will not address the both. The corona crisis will be used to further bring down the wages in private sector.

The economic analyst Uzair Younus brilliantly summarised this juggerly of figures in following words, "The expectation was that the budget would include measures to boost aggregate demand in the economy. But the reality is that this is an accountant's budget, that is bereft of any creative thinking to rescue Pakistan from perhaps the most serious socio-economic crisis the country has faced since independence.

"Like the previous budget, rosy revenue projections are its Achilles heel and I do not see this budget stimulating growth in the coming months. Based on an early assessment of the numbers, my view is that Pakistan will plunge into a deeper recession."

Federal minister for Industries and production Hammad Azhar presented the annual federal budget in the National Assembly. Like every government, he praised the policies of his government and criticised the previous governments for the economic mess that country is facing today.

The budget speech mostly comprises of big numbers as the government official, typically the country’s finance minister, runs through the document in an unusual show of haste, pausing only where achievements and risks are to be highlighted. Inefficiencies and missed targets are explained with a typical blame on ‘inheriting a broken system, economy’, and caution is thrown to the wind as next-year’s projected estimates are announced.

This year’s announcement was no different. But when you look at the finer details, you begin to question if it was even supposed to be different. It should have been.

The budget give the impression that government is following the traditional rhetoric and notion that private sector will lead the growth and provide employment. But the matter of the fact is that private sector is not seems interested to invest heavily this year. It means economy will remain in negative growth zone and more jobs are going to be lost. The crisis situation demands leadership from the government. The government through public investment start public development, infrastructure and social projects and programmes. These projects and programmes create jobs and spur growth.

The official twitter account of ruling PTI tweeted that“NO NEW TAX, generous funds for the healthcare sector, innovation in the education sector through tech, special grants to Balochistan, AJK & Gilgit-Baltistan, funds for daily wagers, agricultural sector, combating climate change & locust attack, that’s PM Khan’s #Budget2020 for you.” So for PTI, it is a wonderful budget that will solve all the problems faced by the country.

The real impact would have been felt if the government has given relief to the common man. No wage and pension increase for government employees and pensioners. But IMF put pressure on the government not to increase wages and pensions. The government even made cuts on the subsidies provided on food and power. The 23% cut was made on the subsidy provided to poorest sections of society. The cuts on subsidies will directly affect the lives of poor people.

The fact is that government had failed to provide any relief to the people leading their lives below the poverty line. Not a single major incentive had been announced for the struggling industries and businesses.