Budget woes

The PTI and the opposition, mainly the PML-N, have been engaged in a bitter war of words over the state of the country's finances, just a week ahead of the announcement of the budget for the year 2021-22. The PML-N has accused the PTI government of virtually destroying the country's economy, with former ministers pointing out that inflation in the prices of items of essential use in every household has grown by almost 96 percent since 2018. They also say that inflation in other prices has been immense and has left people with very little means to sustain life or to avoid poverty. In return, Shaukat Tarin, the finance minister for the PTI, has said the PML-N had left the economy in shambles and that the PTI government had no choice but to turn to the IMF. The minister has also said that the government has set a Rs7 trillion revenue target for the coming financial year and hopes to increase this by 20 percent each year. The government is aiming at tax revenue to stand at 5.3 percent for the coming year.

We know that promises are easy to make. We also know that accusations are as easy to put forward, especially in a situation where economic struggles mark the plight of a country. But we should be asking why Pakistan's growth rate, put by the government at 4 percent, is lower than that of Bangladesh at 8 percent or of other countries in the region. India’s negative 7 percent is also there but has a great deal to do with the Covid-19 crisis, which has torn the country apart. Pakistan technically should be doing far better, if it is to keep up with the world and to compete with its neighbours. The war between the various parties is not a good omen at a time when we need unity and harmony to overcome the fiscal problems faced by the country. This situation means that the budget will almost inevitably be shrouded in controversy. While the PTI government appears to be holding true to its promise that utility bills will not go any higher and that tax collection will continue to grow, there are issues in other areas. Unemployment, for example, remains high and food price inflation is an issue that has not been sorted out despite the prime minister's promise of a focus on agriculture. The government had put various reasons for the increase in the costs of food, citing the smuggling of flour to Afghanistan and other similar problems. This is naturally not acceptable.

The first task of any government is to look after its own people. And the people of the country are today in a state of virtual desperation. Traders who say their businesses are floundering are demanding help of one kind or the other, with the Covid-19 pandemic adding to their woes. The accusations and counter-accusations between the two parties are easy to understand. Ideally, we should have avoided a situation where the economy could create so many difficulties. The challenge for the government now is to put forward a budget that is welcomed by the people and is also acceptable to at least most opposition parties, even in a situation when there is a fierce sense of acrimony and division between the political forces in the country.