Pakistan: Opposition & Allied parties termed federal govt’s budget strategy ‘sketchy

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opposition & allied parties termed federal govt’s budget strategy ‘sketchy & wishful thinking’ while criticizing chief economic czar for bypassing parliament in budget-making.

In a first glimpse of what looks like a response to the upcoming budget, members belonging to the opposition and allied parties have termed the government’s budget strategy ‘sketchy and wishful thinking’ while criticising the chief economic czar for bypassing parliament in budget-making.

In his first-ever briefing to a parliamentary panel on the budget strategy for financial year 2014-15, Finance Minister Ishaq Dar on Tuesday presented the strategy paper to a joint sitting of the National Assembly and Senate Standing Committees on Finance and Revenue in an in-camera meeting.

Dar had to face a barrage of questions after members of the committees took an exception to his move to ignore parliament in the budget-making process. The whole exercise was complete eyewash, as the government did not share tax proposals with representatives of the people, said members after the meeting. The briefing came just days before the presentation of the budget in parliament on June 3, providing no chance for a meaningful discussion.

“What was presented in an in-camera session is already known to us through newspapers, killing the purpose of the meeting,” said former finance minister Saleem Mandviwalla of the Pakistan Peoples Party (PPP). Mandviwalla said the tax target of Rs2.810 trillion for next year was very ambitious and the budget strategy paper was a wish list. The briefing was nothing but just numbers, he remarked.

The government has already agreed on the budget deficit target of 4.8% of gross domestic product (Rs1.4 trillion) with the International Monetary Fund and rest of the exercise is just “number crunching”, said Syed Naveed Qamar, who also belongs to the PPP.

The numbers presented to the committees were notional, having no real value, he said, pointing out that the government did not give a briefing on the budget, as the entire presentation revolved around medium-term budget strategy. According to Qamar, the members of the committees agitated against ignoring them in the budget-making process. “What the government presented to us was a very small step towards taking parliament into confidence.”

They were of the view that the government neither had a plan to curtail inflation nor it knew how to create jobs.

“As a result of the new budget, inflation will increase and there is also a question mark over the government’s strategy to reduce unemployment,” said Senator Talha Mahmood of Jamiat Ulema-e-Islam-Fazl (JUI-F) – an ally of the ruling party.

Describing Rs2.810 trillion tax target as “doubtful”, Mahmood asked when the Federal Board of Revenue (FBR) could not achieve this year’s Rs2.475 trillion target, what magic wand it had to reach the unrealistic target for next year. He underlined the urgent need of introducing drastic reforms in the FBR as corruption prevailed at the lower level. Raising $2 billion by floating Eurobonds and maintaining exchange rate stability should not be treated as benchmarks for economic revivals, suggested Rashid Godil of the Muttahida Qaumi Movement (MQM). The briefing was nothing but a speech by a good orator, Ishaq Dar, he remarked.

Silver lining

Dar assured the parliamentarians that, depending on the Supreme Court’s favourable decision, the government would restore their budget for development schemes.

The finance minister gave personal assurance that not only for next year but parliamentarians’ funds for the outgoing fiscal year would also be allocated in the new budget, said Senator Talha Mahmood.

The government expected the court to give a favourable decision on June 2, he said.

Naveed Qamar pointed out that with the suspension of parliamentarians’ schemes, rural development had come to a halt.