The only thing certain about the next budget is that it will not deviate from the parameters defined by the IMF. From what SAPM Dr Waqar Masood told a parliamentary committee on Thursday, one does not expect any significant relief to accrue to the common man from the budget. Three days back Finance Minister Shaukat Tarin had promised not to levy any additional tax or raise the power tariff. The SAPM however told the committee that the government will try to impose less than Rs 500 billion worth of additional taxes while the increase in the power tariffs has been deferred only for the time being. As the SAPM succinctly put it, the government will reach a consensus with the IMF before the budget and only those proposals will be taken to Parliament that would have been agreed with the IMF.
The PM has taken pride in the next year’s projected GDP growth of 5.02 percent which, if achieved, will fall short of the 5.79 percent achieved by the PML(N) government in 2018. But doubts were expressed in the Standing Committee on Finance about both the projected GDP target and the inflation target at 8.2 percent.
It was a tall claim by the SAPM that commodity prices, exchange rate, food supplies and utility prices would remain stable in the next fiscal year, which would help contain inflation to 8.2 percent. As a committee member observed, the inflation projection for the current fiscal year was 6.5 ercent, which had now been revised to 9 percent, then what is the guarantee that the 8.2 percent inflation rate will be achieved in the next fiscal year? The government’s taxation policies are already causing an increase in the share of indirect taxes, thus hurting the poor more than the rich. Next year’s Public Sector Development Programme had been increased to Rs900 billion from Rs800bn last year. Hopefully the extra funds will be used to provide maximum benefit to the common man rather than to ensure the loyalties of the parliamentarians.
With Moody’s B3 credit rating, Wapda has floated first green Eurobond for $500 million, apparently to meet foreign exchange needs required for its mega and strategic projects of Diamer-Bhasha and Mohmand Dams. One hopes the forex thus acquired will be used prudently and not wasted on luxury cars for the officers.
