Money Matters

No more excuses!

Money Matters
By Zeeshan Haider
Mon, 06, 19

The government last week pulled the curtain on one of the most stinging budgets in the country’s history that would come under relentless scrutiny from all quarters to see whether it succeeds in matching the words with the works.

The government last week pulled the curtain on one of the most stinging budgets in the country’s history that would come under relentless scrutiny from all quarters to see whether it succeeds in matching the words with the works.

Over the past one year the government has been squarely blaming its predecessors for the economic mess. It would be unfair to single out the couple of previous forerunners for the existing economic woes but there’s no doubt they did contribute to this crisis.

The staggering debt burden of Rs24,000 billion is projected as one of the main reasons of the economic woes of the country as almost Rs3,000 billion are annually paid in interest on these loans.

According to the official documents for the budget 2019-20, Rs2,891 billion are earmarked for debt serving as compared to the revised figures of nearly Rs2,000 billion in the outgoing fiscal year.

Prime Minister Imran Khan in his televised address to the nation hours after the presentation of the budget in the National Assembly announced formation of an inquiry commission, made up of representatives from the intelligence and security agencies as well as from the Federal Board of Revenue and Security and Exchange Commission of Pakistan, to probe where the borrowed money was spent.

If history is any guide than all such attempts in the past turned out to be politically motivated.

Therefore, the government needs to undertake some steps to make it a genuine and credible effort.

Since this commission would probe the matter for the previous two governments led by Khan’s political rivals than obviously the opposition would cry foul on such inquiry.

Former President Asif Ali Zardari, after his arrest told media that the probe should not be confined to 10 years but be extended to 20 years to include the tenure of former dictator Pervez Musharraf.

It is better that the inquiry commission should be led by a neutral, non-political, and credible team to enhance credibility of its findings.

But apart from such investigations, the government has to ensure that it would not repeat the mistakes of its predecessors that would only add to the economic predicament of the country.

As part of its austerity drive, the government has cut down expenditures of all institutions working under it and it is matched by an ambitious revenue target.

The Pakistan Tehreek-e-Insaf (PTI) government, soon after coming into power, raised the slogan of austerity in view of the serious economic situation of the country but its performance of nearly 10 months showed that this slogan was rarely turned into reality.

Even the expenditures of the Prime Minister House reportedly exceeded the revised target in the budget.

The government should have to ensure that expenditures should remain within the limits spelt out in the budget.

And it must be followed by a robust campaign to try to meet the ambitious revenue collection target of Rs5.5 trillion.

Before launching this campaign, the first and the foremost task of the government should be to take concrete measures to reform the FBR whose dismal performance in the outgoing fiscal year showed that a lot needs to be done to improve the working of this vital institution.

The government leaders say the previous government has set unrealistic target for the revenue collection and that was the reason for the huge shortfall.

But how could a much bigger target for the next fiscal could be achieved without addressing the problems that caused the shortfall in the outgoing year.

Advisor to Prime Minister Abdul Hafiz Sheikh has vowed that the government would go after the rich people to meet its revenue target and by expanding the tax net. But the main test for him and his government would be to perform a different way compared to their predecessors.

The government has brought down the staggering $19 billion current account deficit it inherited by bringing down imports but the main challenge for the government is to earn more foreign exchange by drastically raising exports.

Over the past two years, the exports of the country have been stagnant. While a slowdown in the world economy is considered one of the main reasons for this stagnancy but the governments’ efforts to spur exports have also failed to produce desired results.

Despite the announcement of a hefty financial packages and drastic devaluation of rupee, the exports have shown no upward trend.

The abolition of zero-rating regime has further dampened hopes of a hike in exports and how the government will address exporters’ concerns in this regard is yet to be seen.

Since it is PTI’s first time in power at the federal level, one could take a lenient view of its performance by saying that they took time in getting the true picture of economy and the hang of dealing with the bureaucracy.

But now that they are close to completing one year in office and they have appointed their trusted men in key positions, such excuses could not be entertained for long.

Now they have to show their performance and have to put in their best efforts to achieve their targets.

But all this could be done if there is less politicking. Unfortunately, in Pakistan all efforts aimed at improving economy are overshadowed by political developments.

And there is now a growing fear that this time around the same may happen.

The presentation of the budget should have been followed by a genuine debate in the parliament over the budget but it has been subdued by the political issues.

Moreover, the opposition is trying to woo a key ally of the ruling coalition in an effort to block the smooth passage of the budget through the National Assembly.

The government is all likely to be ultimately able to put its house in order to pass the money bill through the parliament but the political maneuvering underlines the challenges it may face in future.

It is therefore advisable for the government to bring down political tensions in the country and take political discourse to create an enabling political environment in the country to allow it to effectively handle the challenges faced by the country.

The writer is a senior journalist based in Islamabad