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May 21, 2015

Expectations from the new budget


May 21, 2015

The broad contours of the budget have started emerging as the deadline for its announcement is drawing closer. However, at this stage nothing can be said with precision but indications are that the budget might lay considerable emphasis on growth, investment and further improvement in business environment.
Finance minister recently said that the interest of the people would be guarded while framing the new fiscal policy. Encouraging words, indeed. That should, in simple language, mean that the people would notbe burdened with such taxes as might add to an already prohibitive cost of living. The low inflation rate, lower than many years in recent past, might be tempting to tap the proverbial source, the common man, but hopefully it would be avoided. Let the finance minister’s actions speak louder than his words.
The annual development programme will be, it seems, quite substantial with resources to be made available for energy projects, communication networks and social sectors. Each year, development allocations are made for the ongoing schemes as well as for the new ones. But let us pause here for a while and submit that the dilapidated condition in which the infrastructure like roads, government schools and college and hospitals find themselves looks pathetic. How else can it be described?
There is no point in gong back into history through which ample light can be thrown on poor management of most of what has already been established in terms of welfare schemes for the people. Let us only take the case of water crisis, loadshedding of electricity and gas, rail and road transport miseries. A metro bus or a green line train between Islamabad and Karachi cannot for the ordinary mortals spring make.
The protection and preservation of the in-operation infrastructure and the facilities they provide is equally, if not more, important as the timely completion of ongoing schemes or starting of the new ones. What could be more ironic than slashing of vital

socio-economic projects every time the successive governments have been feeling the resource crunch. The ambitiousness reflected in annual development plans is only matched by the inability of their fuller implementation.
The provincial governments are also responsible for the much talked about neglect of social sectors. It defies comprehension as to why development funds are allowed to be lapsed. Equally strange is the provinces showing budget surpluses to cover part of the overall fiscal deficit. This appears quite quirk logic unless financial wizards both in the economic ministries as also outside of it educate the masses on such intricate econometrics.
For several decades, the much-touted slogans have been that let us live within our means. But this exactly what has not happened nor is likely to happen any time soon. On the contrary, the burden of debt has been escalating and so the burden of its annual servicing of repayments. Economic problems including that of resource generation have been well identified and any number of solutions is also available. Let the forthcoming budget be known as one that is high on reforms and relief.
To build the new budget on a fairly satisfactory rate of economic growth, control over fiscal deficit and low inflation in the outgoing year coupled with huge decline in international oil prices appears less challenging than what the government had inherited as a fragile economic situation when it came to power. Now the economic recovery is being acknowledged by international financial institutions. This must have made the task of the budget-makers easier and hopefully they would ensure that the gains made by the economy are also passed on to the common man.

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