It is an absolutely unrealistic plan, only good if no-one ever needs to execute it. The plan has two parts to it: the soft part and the hard part. In the soft part, they talk about good governance, reforms, and social contracts. However, there is no quantitative criteria to fulfil or measure its possible success.
If one focuses on the economic agenda, there are two key initiatives which the PTI desires to take in order to liberate Pakistan from economic upheavals. One is that it will pay off all the accumulated debt. Secondly, it claims that they will produce 10 million jobs and construct 5 million houses in 5 years.
Pakistan has roughly built 19 million houses in the past 70 years, since its inception. It is ludicrous to assume that the PTI-led government will manage to construct this many houses in 5 years. Technically, it is not possible to create more than 25% of the houses built in the preceding 70 years.
Pakistan has roughly built 19 million houses in the past 70 years, since its inception.
Even if they decide to implement their plan and make the houses somehow, the cost of the 5 million houses will be out of their reach. For example, if one house is built at the cost of Rs 2 million, Pakistan will need approximately Rs1,000 trillion. Where will the money, to support this initiative, come from? No one knows – they have not explained it.
Moreover, as far as job creation is concerned, it is possible but it has stringent conditions attached to it, which makes it again, unrealistic. For example, Pakistan’s economy will have to grow by more than 8% to produce 2 million jobs per year. This effectively means that Pakistan will have to create roughly 166,667 jobs per month.
Suppose, somehow Pakistan manages to hit the 8% GDP mark. In Pakistan, the service sector contributes approximately 60% to the GDP. A dominating sector like services cannot create so many jobs. Therefore, hitting the mark in a span of 5 years is almost impossible. This agenda, by nature, appears to be a political stunt.
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Since the ordinary person is unaware of the nitty-gritty explained above, it can easily fascinate the masses. It tempts them to believe that with 10 million jobs, their children will easily find employment. The homeless get a respite hoping to get lucky with accommodation if the government decides to make 5 million houses.
Even if they decide to implement their plan and make the houses somehow, the cost of the 5 million houses will be out of their reach.
I think PTI itself is going ahead with its plan to capture and persuade ordinary people to vote for them. It is an election agenda which cannot be implemented. Once in power, PTI will revise it. Having said that, some targets are not entirely impossible. For example, overhauling the FBR is possible.
However, if we analyze KP’s last five years performance in the context of tax management, its capability to collect taxes has improved by only 4%. It is nothing if we compare this with Narendra Modi’s performance in Gujrat, which was the basis for his landslide victory in Delhi. Based on the evidence available in KP, I am not hopeful of a significant increase in tax collection.
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However, if the commitment is shown, the FBR can be revamped. But, for this to happen, new monitoring, tools and systems will be required. It will be a difficult task for the PTI government to bring any drastic changes in the FBR. Independent estimates indicate that the FBR collects 82% of its total revenue in indirect taxes and only 18% indirect taxes.
Even, if Pakistan manages to improve it, as India did to some extent, I cannot see this reversing up to a point desired by Asad Umar. But, improvement is possible. On state-owned enterprises, their value is less than 1% of Pakistan’s GDP. If
Since the ordinary person is unaware of the nitty-gritty explained above, it can easily fascinate the masses.
PTI manages to overhaul them by a 100%, let’s suppose, revenue will not improve much but it will cut down the subsidy wasted in these cash strapped companies. In the case of circular debt even if subsidies are reduced, the circular debt will stay. It is a systematic debt, which will continue to accumulate. To reduce it, the PTI government will have to increase electricity prices.
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Since the government owes the circular debt to the private sector, whereas the government provides the subsidy on electricity to consumers. Whenever the demand for electricity will increase, the circular debt will increase, because to bridge the gap, the government will have to pay from its own coffers.
This consists of more than Rs 1,000 billion. It is not possible to reduce the electricity prices and circular debt simultaneously, as both move in the opposite direction. In a nutshell, this is a very challenging agenda, with a margin for possible improvement.
Dr. Sajid Amin Javed heads Policy Solutions Lab at Sustainable Development Policy Institute (SDPI) Pakistan. He has previously worked with Pakistan Institute of Development Economics(PIDE), National Institute of Population Studies (NIPS) & Ministry of Defense Pakistan.