close
Thursday March 28, 2024

Covid-19 friendly, public unfriendly budget 20-21

By Senator A Rehman Malik
June 17, 2020

I would like to point out that the current budget is nothing but playing with the statistical figures just to complete the usual budget formalities. The govt has no vision to steer the country out of Covid-19 crisis which are going to increase by many folds. The minds of leadership of govt are frozen as they are working without having a vision and have not been able to decide the amicable course to control the pandemic. This fact is reflected in the budget and we see is no extra budgetary provisions for health sector allocated to control Covid-19 which is the real issue today.

Covid-19 will continue to hunt its prey unhindered as there is no effective policy backed by the budgetary provision. We are dealing with this monster of coronavirus in a very casual way and public is suffering and will suffer more as no provision of extra hospitals and other logistics to cope with the Covid-19.

The government has confessed that there will 1.2 million Covid-19 patients by the end of July where as I gave the indication a month back that it will be over two million by the mid of July and by the WHO formula the patients number is now 2 million whereas our capacity/spaces is not enough to cater it - Will the govt justify why there are no funds allocated for increasing the ability and capacity of health and to have more hospital facilities.

The budget is also failing to identify as to which segment of the society it is directed for. The public at large thinks that neither it is serving the business class nor the daily wager.

The government has clearly failed to demonstrate a sense of leadership when our country is facing problems on every front, whether it’s the Covid-19 crisis, locust invasion or high inflation. Massive unemployment, falling revenues and negative economic growth are among top failures of govt to contain Covid-19 and it has basically given face saving but will see more difficulty in coming days.

The budget rather than seeming to be serving the poor, looks more likely as an agreement of belt tightening with IMF with ambitious revenue target without increasing the buying power of the people. It has falsely been claiming of not imposing new taxes when the revenue target has been scaled up to Rs4,900 billion.

It looks perhaps the govt has lost its hope to continue to be in power as I see confusion and lack of ability to hand the tricky situation.

The income tax rates have been raised from 25 to 35%. The zero rating facility for 5 export oriented sectors was withdrawn last year with a promise of timely refunds, but those industries have been suffering to get timely refunds and it further adds more closures.

The Federal Budget 2020 is display of absence of economic leadership, zero, vision or wise direction to take the economy forward, lack of coordination amongst the cabinet members and parliamentarians and the inability to efficiently deal with deteriorating economic issues. No one in the government seems to take the blame or responsibility of inflation, mishaps, air crash, locusts attack, sugar and wheat price debacle.

The govt had ill-negotiations of IMF programme rather a criminal negligence to have not gone for written of foreign debt under forced majeure as this is the opportunity which we must not lose.

The new fiscal budget 2020-2021 has been designed in line with a staff-level agreement with the International Monetary Fund (IMF) for a bailout package as government puts a ferocious array of taxes on almost all sectors of the economy. All the income tax payers will bear a significant brunt of the new revenue maximisation effort of the new fiscal year on July 1.

The government has increased income tax rates from 25pc to 35pc at present as the government is aiming to raise Rs258bn of additional revenue from income tax alone. The government has eliminated zero-rating facility from 5 export-oriented businesses and has imposed 17% GST as it is expecting to raise 250bn incremental revenue from sales taxes.

Although the rulers are trying to join the bandwagon with other countries by saying that the Covid-19 pandemic reversed the growth rate without realising the fact that government’s performance was unsatisfactory anyway, even before the corona outbreak.

They are trying to stand behind the excuse of pandemic to justify the series of their failures. It is also to be noted that the other countries of the world have remained under strict lockdown condition that is affecting their economy whereas in Pakistan, all the business and activities have been on the go like normal as there no serious lockdown has been imposed as yet.

The government has not given relief to the salaried-class, instead, it is freezing the pension and salaries of civil servants.

The promises made to the erstwhile Fata/merged districts have also been forgotten. The govt has been making tall claims of allocating the Rs100 billion for the merged districts every year for 10 years, but they have not honoured the commitment and have committed only Rs48bn for tribal areas.

The govt is making false claim of having announced a tax-free budget despite the fact that they have set Rs1900 billion tax collection target.

The agriculture sector holds a major share of contribution to the growth rate of our country, but the government has still not announced any relief for the farmers. The government has failed to provide any relief to the common man in the federal budget.

While we are in the middle of a pandemic, our health sector receives only 25bn at federal level and overall 1.3% of share.

The efforts taken by the govt to take control over Covid-19 seem like a joke and It looks that the govt itself has been taken over by Covid-19 as there are no strong counter measures against the disease. The govt has also missed out on the following issues that needed to be paid attention to in the budget:

- No adequate allocation for water management.

- No required allocation for farmers.

- No budget IT zones.

- No allocation for education developments.

- No allocation to improve the aviation sector including PIA.

- No plan and proper allocation for environmental programme.

- No allocation for self-employment to curtail unemployment specially in our corona ridden country.

- No allocation of rehabilitation plan post Covid-19.

There are hardly any substantial allocations for more detection, treatment, hospital expansion, research and improvement in the doctor’s cadre & paramedical staff. Covid-19 will grow at the cost of many lives of in Pakistanis. I will not hesitate on stating that this is an unfriendly budget for poor rather more friendly to Covid-19.

We are losing the opportunity of availing to invoke the forced Majeure law because of this natural disaster. I expect unbearable price hike because of this budget in coming six months as IMF has once again trapped us more strongly in its clutches.

Note: Opinions expressed are solely my own and not necessarily to reflect the views or opinions of my party.

The writer is former interior minister of Pakistan, Chairman Senate Standing Committee on Interior and Chairman of Think Tank "Global Eye". He tweets @SenRehmanMalik and can be reached at rmalik1212@gmail.com.