It is less of a budget and more of a political slogan, which is what PML-N needs heading into the election period. They have given out extensions, increased pensions, raised salaries and claimed that no new taxes were being proposed. This makes it a contradictory situation, which is increasing the current expenditure while keeping the tax levels stagnant.
It is really not a budget, more an election ‘tactic’. You cannot base a budget based on figures collected in 6 to 7 months. Historically, decisions relating to the budget are based on figures collected over a period of 9 months, and then built on further.
The problem with our export sector is the cost of input; which was not fixed in the budget. The purpose of a budget is to counter problems of the country but no such initiative is visible in this budget. Ideally, the budget addresses issues facing the country and comes out with solutions. This is what the 2018 PML-N budget is lacking.
Due to levy on petroleum, the inflation levels will rise, the cost of inputs will increase even further and the exports will bear its brunt.
The current account deficit and the budgetary deficit are two of the largest flags for the country but no solution has been proposed for them. I don’t think there are any political intentions to achieve the budget or any of the targets mentioned. These are just figures that have been thrown out of nowhere.
The way our Ministry of Finance makes the budget is the exact reverse of how it should be. They gather the details of expenditures of all ministries and remove the IMF budget deficit target from them. We should calculate our revenues first and then try to build our expenses into the revenue scheme.
Due to levy on petroleum, the inflation levels will rise, the cost of inputs will increase even further and the exports will bear its brunt. In my opinion, we will have to issue a financial emergency in the next few months, and go back to China or the IMF.
However, the growth financing needs this year stand at around $26 billion; no country in the world can actually finance or support our current account deficit – even China and Saudi Arabia combined cannot help us. The only real option will be to go back to the IMF.
Dr. Farrukh Saleem is currently an Anchor on channel 92, a columnist for the English newspaper, the News. He is a game theorist by training, and has a PhD from the Western Illinois University. Farrukh Saleem has worked extensively for international donor agencies as well as leading a research project on politics and education at the Center for Research and Security Studies (CRSS). He has extensively published articles on geopolitics, economic competition, and education reforms.