Fatima Zaidi |
It has been five days since the government of Pakistan released the budget for the fiscal year 2017-18. The media has been keen on discussing and re-evaluating the government’s monetary and fiscal policies reflected in Mr. Muhammad Ishaq Dar’s budget speech.
The biggest question is: Has the government really made changes or has it presented us with yet another copy of last year’s budget with minimal editing of the actual figures? We have witnessed a continuity of annual budgets that do not target the ever-growing problems and constraints faced by our country.
Only Rs.180 billion have been allocated to finance the projects under CPEC, which is only 14% of the development budget.
The highlights of this year’s budget are listed here. 18.4% of the Rs.4.8 trillion budget, i.e. Rs.920 billion, has been allocated for the defense sector. It has increased by 7% from last year’s defense budget, which was Rs.860 billion. Rs.1 trillion have been allocated for development projects, seeing a 40% increase from last year’s budget for development that was Rs715 billion. The minimum wage has been increased to Rs.15000 per month. To meet the downfall of energy output, the government has set an objective to increase the energy output by 10000 Megawatts. To facilitate the country’s agro-based economy, the budget has set aside Rs.1 trillion to be handed out as loans to the farmers for upgrading machinery, using HYVs, and shifting from manual labor to mechanized farming. Furthermore, Rs1.36 trillion have been assigned for debt-servicing.
The defense budget has sparked up an immense debate with the media expressing different views on the allocated amount. On one side, people are criticizing the budget, arguing that the country needs to focus and spend more on development, health, and education. Contrary to that, others claim that it is a necessity, keeping in view that our neighbor India has announced a $50 billion defense budget, along with increasing tensions on the east and west borders of Pakistan.
Development projects and minimum wage
The minimum wage was increased the previous year, but country-wide examples of the law not being implemented were seen.
The amount set aside for developmental projects portrays a positive approach, considering there has been a 40% increase from last year. However, only Rs.180 billion have been allocated to finance the projects under CPEC, which is only 14% of the development budget. This shows the government’s lack of interest in boosting this economic corridor, and risks a strain on the relationship between the two countries. CPEC is being regarded as a historic landmark in the development of the nation as it focuses on all sectors of development, most visibly development in the energy sector, infrastructure, and transportation. Thus, it comes as a surprise that the government is willing to put most of the burden of financing this project on China. However, we cannot discredit the government for its efforts, most notably bringing a 100% increase in the amount assigned to the health sector.
Another step towards prosperity can be seen by the government increasing the minimum wage to Rs15000, but the actual benefits of this step are debatable. The nation is witness to numerous laws being introduced, but then a failure to implement them. The minimum wage was increased the previous year, but country-wide examples of the law not being implemented were seen. Even big names and companies did not give much importance to it. This year, again, a similar approach has been applied. Moreover, there is a huge presence of unregistered sector of employment. This sector not only avoids paying tax but also does not pay heed to the laws. Minimum wage and child labor laws are frequently ignored.
The promises to end energy crisis, again
Is it only an appealing approach by the government aimed to grasp votes and confidence of the masses for the upcoming elections, or is it a genuine effort to improve the economic condition and induce development in Pakistan?
The government has yet again promised to finish the huge energy crisis, and are claiming to bring an end to load-shedding. But the nation feels like these claims are quite empty. Promises have been broken time and again. However, seeing that China is involved this time around, it has created a ray of hope for the people. The shortfall of energy has greatly affected the industrial sector of the country, and there is a similar shortfall for domestic use.
Additionally, keeping in mind that our economy is agro-based, and it forms the bulk of our exports, the government has focused on improving farming sector in Pakistan. Throughout history, we have seen that our country has a great potential for crop and livestock farming, and this is evident as Pakistan produces a surplus cotton and rice. Thus, the budget aims to provide loans with less interest and easy return plans to help the farmers upgrade equipment, switch to HYVs, create wells, insert tube wells for irrigation, and use chemical fertilizers to maximize the output. This step deserves appreciation.
To conclude, the question that this budget brings forth with it is whether it is only an appealing approach by the government aimed to grasp votes and confidence of the masses for the upcoming elections, or is it a genuine effort to improve the economic condition and induce development in Pakistan?
Fatima Zaidi is a student of Bachelors in Economics and Politics from University of London International Programs. She is an avid reader with interests in current and world affairs. The views expressed in this article are the author’s own and do not necessarily reflect Global Village Space’s editorial policy.