The month of May brings great hope and anxiety as we take a close look at each passing day and also take a keen interest in TV news and analysis. There is only one event we looking forward to – the annual budget. The budget not only tells us how we fared in the previous year, our expectations in the year ahead, and also brings hope that it will not only reduce inflation but also provide an abundance of jobs.
However, when the budget is presented, rather than providing any relief to the masses, we learn that new taxes have been imposed and the existing expenditures have multiplied. This year people still have the same hopes that the budget – which will be presented on June 11 – will not only create jobs but also reduce inflation, while government employees are expecting a 10-25% raise in salaries. Before you keep your hopes ahead, let us look at some facts about the budget.
Pakistan’s budget layout for fiscal year 2020-21 was Rs. 6.911 trillion, while the current budget layout is expected to be Rs. 7.294 billion. Around 45% of the budget amounting to around Rs.3.214 trillion were paid for interest payments and loan installments. Of the remaining budget, one portion was allocated to the military and other law enforcement agencies due to the country’s geo-strategic location and security issues. The rest includes a significant amount of non-development expenditures. The spending on development expenditures was around 600 to 1,000 billion rupees, nearly half of which are not even spent. Hence, nothing is left to provide relief to the masses. The upcoming budget will not be any different either.
The biggest cause for concern in Budget 2021-22 is that the targets have been set exceptionally high. Last year public expenditure was set at Rs. 4950bn and has been increased to about Rs. 6300bn. This means that revenue is expected to increase by Rs 1,000 crores. Last year, the government set its own targets in line with the IMF’s directives, which caused immense resentment among businessmen and the general public.
The government needs to reconsider the high targets that it has set as they will be rather difficult to achieve. This is unlikely when the budget is made under the auspices of the IMF.
It is also been heard that the government has not given much importance to agriculture in the budget this year and no significant amount is being given to this sector,
At the same time, there have been no significant steps for Small and medium enterprises (SMEs) which account for more than 90% of our industries. If this vital sector is ignored then the government cannot achieve its lofty targets. Prime Minister Imran Khan has often emphasized on education, but this year as well, the budget for education will be abysmal. There have no steps taken for primary education or any collaboration with the provinces, and there is nothing in the budget to that effect.
The agriculture sector suffered a lot last year from locusts and other such calamities. This year it was expected that agriculture would be given importance to focus on the problems and funds will be allocated in the budget but so far, there has been no move in this regard. There are significant tax increases on gas, electricity and other utilities in the budget, which certainly increase prices their prices for domestic and industrial consumers.
Pakistan’s exports have not increased significantly and remain at $21bn. Our exports could easily go up to $25 billion, but the government focused on the domestic rather than export-oriented industries. In light of all the highlights, I will not ask you to give up hope but request to keep your expectations low. We should focus on paying our taxes as Pakistan’s tax ratio is less than 10% due to which we can’t raise revenue and this is the cause of our budget problems.
