Experts see budget figures as extremely fluid

Islamabad : Declaring the figures of the proposed next federal budget extremely fluid, economic policy analysts insisted in a seminar that the government would have to change those numbers by the time of their approval by the National Assembly.

They also opined that the political instability, which coincided with the economic instability, had created a critical situation for efficient budget planning and approval.

The hybrid seminar titled ‘The Federal Budget 2022-23: A Review’ was organised by the Institute of Policy Studies (IPS) to evaluate the next budget and its economic direction through the ‘lens of policy’.

Former chief economist of the Planning Commission Dr Pervaiz Tahir said the present budget indicated no seriousness and philosophy behind its preparation.

He said despite setting growth targets, the country was not moving towards growth due to inherent challenges and limitations in its economic structure.

“Many problems and challenges will continue to exist for some time before actual growth is visible,” he said.

The former chief economist declared the low long-term investment rate and direction of the growth target as challenges and warned that a growth rate beyond six per cent could create a crisis for Pakistan.

Talking about the role of the International Monetary Fund in budget approval or planning, he said that Pakistan would have been in a different position if it had done its planning without the intervention and role of the IMF.

Former finance secretary Dr Waqar Masood Khan said the federal budget had failed to address the people’s grievances and gain public trust. He voiced concern on the trade deficit, revenue generation, tax-to-GDP ratio issues, and expenditure of the government and said no option was left for any productive investments to make the economy stronger.

Founder of the Centre for International Entrepreneurship and Trade Zaheeruddin Dar said the budget figures were expected to change with the actual picture becoming evident at the end of the fiscal year through closing accounts.

He said Pakistan was already going through a default state in terms of the balance of payments but had not announced it because that would make the elite pay the price, unlike the current scenario in which the poor did so.

Mr Dar said the capacity to pay taxes was decreasing every year causing a continuous increase in tax rates, a decrease in the tax-to-GDP ratio, and decreased economic activity.

He said the country faced several challenges due to the Ukraine conflict and to meet those challenges, it had to invest in its economy timely to generate productivity.

Former chairman of the National Tariff Commission Abbas Raza said the budget presented a very bleak state of the economy faced with trade deficit on one hand and unmanageable foreign and domestic debt on the other.

While highlighting the silence of the budget on various issues, he complained about the government’s failure to propose effective policies and measures for debt retirement, domestic revenue mobilization, industrial revival, control of POL prices, and inflation control.

He warned that the consolidation measures adopted by the government would increase the unemployment rate, weaken industries, cause artificial hyperinflation, social imbalances, crimes and political instability, and threaten economic collapse.

Islamic Economics Project director Dr Salman Ahmed Shaikh resented funding cuts for public sector development programmes and social protection sectors.

Former water and power secretary Mirza Hamid Hassan expressed concern about the much-neglected energy, water, and food security and said despite the very critical current situation, there seemed no direction in the budget for environmental adaptation. He called for the conservation of resources and the resolution of flaws and lapses in decision-making and policy.

IPS chairman Khalid Rahman said focusing on the budget as an exercise and subject of political economy would create better understanding and productive outcomes in the present scenario, which was marked by deep-grown governance issues and resource management inefficiencies.