Mini Budget: Threat and Regret
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It does not matter whether the average Pakistani is alive or dead the mini budget has been imposed on all and the condition would worsen in the coming days both with speed and intensity.
Amazingly, the sizable budget of 170 Billion Rupees, misnomenclatured as Mini Budget has been destined for the public already counting their days of lives without hope in misery. With an increase in the sales tax 18 to 25 percent to collect the target revenue of about 400 billion. Furthermore, the increase in the petroleum products, 22.20 rupees in petrol, 18.20 rupees in high speed diesel and 22 rupees increase in the LPG per Kg are nightmares which would drain more blood from the already badly bleeding economy of the nation.
It is a pity that almost all of the edible and consumable items which are basic necessities, not a luxury have been compromised indiscriminately without considering the common man. Even the toys for children have been taxed including the graves of the bereaved have not been spared.
The situation would bring about a high surge in inflation of about 35% the worst ever in the history of the country and is also the highest as compared to the neighbouring countries of the region.
Both the direct and indirect impacts of this mini budget are a nightmare for an unstable economy, energy, cost of living and dollar crisis growth and development. Accosting to some economists. The economic growth might sink to negative.
The foreign reserve has reduced to the record lowest level of about 3 billion for the first time in the 75 years of the country as reported by the Moody, Fitch and Standard ratings.
It is also interesting to highlight that some sectors and industries like real estate which is a very much stable and prevailing industry in Pakistan to a level of future threat to food shortage, due to over-utilization of agricultural land, has not been touched or disturbed in this mini budget and been kept immune from any taxation thus not involved any burden sharing with the common public.
It is relevant to indicate here that foreign financial assistance in the forms of loans, grants and aid is not a permanent solution to the current crisis. The top leadership of almost all the political parties have become genetically corrupt, incompetent and impotent to drive the country and the nation out of this disaster so created by them and their predecessors over the years
The dilemma is that there is no future planning nor a solid roadmap to get out of this crisis as the political parties and leadership since independence have been struggling just for power and rule, not for the politico-economic stability of the country and this tug-of-war is still ongoing rather it is intensified in the recent times at the cost of the nation. There are many precedents on the record but in the recent past a highly condemnable audio leek of a former federal finance minister of the PTI government in which he is influencing the finance ministers of Punjab and KPK government to sabotage the IMF program against the national interest to benefit his chairman and his party at the cost of the country. Moreover, there is a lack of political leadership with sincerity, strong commitment and without personal interests to pull the nation out of this hell.
In reality, a loan of about 1.2 billion dollars by the IMF is insufficient and inappropriate for an atomic power and representative voice of 57 Islamic countries and does not increase the foreign reserve of the country nor for any other significant economic growth and activity hence this loan alone does not obviate the impending danger of getting default. Furthermore, Pakistan’s friends are also reluctant to support, give loans or invest in the country as are the other countries amidst this turmoil.
Unfortunately, the government has wasted the last four months in a state of indecision and failed to take any remedial or prophylactic measures to handle this situation. The burden was never been shared in a stepwise or gradual manner now it is added suddenly and abruptly which is adding fury to this fire. Side-by-side selling and mortgaging the national assets and institutions is also not a better option nor a permanent solution.
The foreign direct investment has already dropped down to an alarming level, the industries are in the worst condition, the new industrial units are not being established rather the old are closing down, production has reduced further due to the huge cost of production hence affecting the exports. The investors are moving out of Pakistan. The economic activity would be compromised further enormously.
The defective decision and the vision of the government in this situation inherently gifted by the IMF program and the faltering economy by its immature and incompetent predecessor have gravitated this country towards the state of the official declaration of being the default, as the country in real sense is passing through but only the official declaration is awaited.
The nation is already suffering due to recent massive flooding affecting the three provinces altogether, the worst ever in history, though claimant to be a planned manmade disaster by the HAARP technology and this mini budget might prove fatal for the poor economy on the- ventilator.
Another dark side is that over the last 75 years, only the common public has been putting to sacrifice and the ruling, elite class have never surrendered in any aspect being the parasites living on the public.
The talent of Pakistan has drained out and in the present situation, it would be drained further. Employment, crimes and even terrorism might flare-up.
It is also rumoured that the new deal with IMF is underway for the next financial year. In addition, the recent visit of the International Atomic Energy Commission’s (IAEA) representative to Pakistan at that moment when the negotiation with IMF is in the final stage is quite meaningful and raises many questions.
Without improving the tax collection system and other tax reforms increasing the direct and indirect taxes is not an ideal remedy. There is a need for an effective, efficient and transparent tax, and revenue collection system or mechanism at all levels. Tax evasion through fraud and theft in all sectors especially in the energy resources like electricity and gas etc is also controlled at the domestic and industrial level both in public and private sectors, to achieve the set targets. Moreover, the free utilization of all resources by elites and the privileged should also be withdrawn or reduced immediately.
The government must cut down its expanses, In the first instance, the size of federal and provincial cabinets should be minimized, the austerity measures be adopted like cutting down the free electricity, gas, petrol, air travel and transportation expenses. Security and protocols must be withdrawn immediately from all representing all pillars of the state etc. The grant of plots and heavy pensions and other perky befits to all pillars of the state should be recovered and auctioned and properly utilized. In future, no such gift privileges are granted to them.
The production and imports must be promoted globally bad and the export of all items must be banned and the local products and brands should be used as up neighbouring India and Bangladesh.
All the political parties and leaderships including Beaurocrats, Army, Judiciary both in service and retired fraternity, the businessman community, civil society and Media must contribute visible financial and moral support to pull the country out of this marsh.
The policy of self-reliance and independence should be adopted by throwing away or gradually withdrawing from foreign assistance like IMF, World Bank etc. with their unrealistic and unnecessary demands, terms and conditions inconsistency with the sovereignty, independence and ideology of Pakistan.
The potential youth which is the major chunk of the population and has been being misguided, misused and mistreated for the ulterior motives of some perpetrators should be utilized properly and purposely in this crisis.
These decisions are not difficult but also dangerous, dreadful and draconian in the long term. What would happen if this mini budget fails to get the desired results? The question would be insomniac to the nation. Most Pakistanis now believe that the Stone Age was better, simpler and easier and is acceptable to them today than present atomic Pakistan.
Lastly, all the political parties must sit together and enter into a serious ‘Dialogue on Economy’ sincerely, beyond their dirty and fifthly politics in the best interest of the future of the country. Remember it is never too late!!!