It could be viewed as an abject failure, or as a signal success. Budget 2024-2025 was passed without any changes in the taxation proposals from what had been presented when the process started on June 12. This proved almost too late, as the Budget was passed only on June 28, with two days left for the beginning of the new financial year. There used to be a rush to present the Budget, by as much or even more than a month, because new taxation measures were implemented as soon as they were announced, and thus the government got the benefit of the new taxes for as much as six weeks. The Supreme Court stopped that, and ordered that new taxation measures would only come into effect at the beginning of the new fiscal year. Since then, the government has grown lazy, and only allows time needed to pass the budget in advance of the new financial year.
Also distressingly usual is the presentation of tigerish taxation measures, but their withdrawal after protests. However, there were no withdrawals this time, unless one counts the restoration of the zero-rating regime for exporters. Thereqwere none of the revisions of income tax slabs either. Previous exercises had made the Budget presentation a testing of the waters, an opening of negotiations; rather than a forthright declaration of what was going to be done, come Heaven or high water. As Prime Minister Shahbaz Sharif forthrightly admitted to the House, the Budget was prepared with IMF input, and the government knew well that much depended on it if it was to get the package it so desperately needed to stay afloat. The inexorable logic behind that was the the Budget as presented was the one which the IMF was to take as the final one, without any going back at the time of passage.
The the budget has passed is not just the start of the Shehbaz government’s journey, but also proved an obstacle overcome in relations with the PPP, Was the PPP’s initial reluctance to join in the passage of the Budget merely a dress rehearsal for the future, or was it indeed about how its cadres were being treated in Punjab? Stress is nowadays placed on the confrontation between the PML(N) and PTI, but Mr Sharif’s interactions with the Zardaris, father and son, will also bear watching.
