Albeit the stars are on our side during the Middle East escalations, nevertheless, the upcoming budget is projected to be presented as an enforcement document rather than a long-term economic plan, and as usual, there is no relief expected for the working class. Yet, the government is ambitious that Pakistan has achieved economic stability, and its financial representatives keep on reinforcing the cliché numerics and greenhorn formulae to glorify the meager fiscal reforms just like a first-year economics student. Indeed, the economy has recovered from the FY22 crisis, and the fiscal deficit of FY26 is going to be recorded at a 21-year low; however, still it is not praiseworthy enough, as there are neither the signs of a GDP growth outpacing, or at least synchronizing with the population growth, nor any of that of a major investment in the near future.
The way the International Monetary Fund (IMF) dictates the budget, the way the taxation policy slams the salaried class, the IPPs squeeze the consumers, and the elites from sugar, steel, real estate, agriculture, cement, banking, and the auto sector enjoy tax breaks, subsidies, and import protection, it has become clear to realize that Pakistan’s economy has completely been hijacked, just like various other aspects. While, in the wake of that, Pakistan has become a country where the political and economic decisions have been depleting the middle class, especially during the last five years, when the World Bank was alarming the surging poverty rate of 44.7%, while the government was eagerly borrowing greens. Besides, the so-called neoliberal mantra and the-govenment-has-nothing-to-do-with-business rhetoric have resulted in nothing but extreme poverty, unemployment, surging crime rates, and social fragmentation. The fact is, Pakistan is regressing like any Sub-Saharan state, as it has lost the potential to be listed in competition with its regional competitors, probably. However, ‘Hope is a good thing,’ as they say in The Shawshank Redemption, ‘maybe the best of things, and no good thing ever dies.’ Thus, the business leaders and economic experts have proposed several measures for the budget to resolve the economics.
Mian Zahid Hussain, the Chairman of the Budget Advisory Council of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) told Daily Times that the FPCCI has submitted 90 budget proposals to the government. He urged the government to focus on a growth-based, sustainable economy rather than the traditional revenue-driven manner. He also emphasized rationalizing energy, especially the electricity rates for the industry to boost exports and minimize poverty via generating employment. Besides, he claimed that if the government complies with the FPCCI proposals, the exports of FY27 can be increased by 10 billion USD to be recorded at 40 billion USD, cumulatively. Otherwise, he warned, the industry could not bear any further burden, which could result in economic paralysis.
Abu Bakr Shamsi, the Chairman of the Special Committee on Budget Proposals of the Karachi Chamber of Commerce and Industry (KCCI), while commenting on relief for the salaried class, told Daily Times that the entire focus of the government should be on broadening the tax net and lowering the tax rate. He expressed that the undocumented sectors like real estate, agriculture, retailers, wholesalers and the services sector must be brought into the tax net, which shall not only provide relief to the salaried class employees but their employers as well. He articulated that, due to limited tax net, Pakistan has been facing brain drain and skilled labor shortage, impacting quality control. Besides, he warned that the hike of 100 basis points in the GST could soar inflation by 6 percent, making the business environment more risky.
Dil Awayz Ahmad, the CEO of Darson Securities, while speaking to Daily Times, affirmed that the Pakistan Stock Exchange could easily achieve the historic watermark of 200K points, if only the Super Tax were curtailed in the upcoming budget. He emphasized that the government should slash the Super Tax completely, if not in one go, then at least in four consecutive moves. He highlighted that it can significantly boost the earnings of banking, fertilizers and other large-scale sectors, resulting in investor confidence. He also urged the government to rationalize the energy tariff.
The wise guys from Islamabad and even the Central Bank Chief keep on reiterating their focus on slow and steady economic growth to avoid repeating the boom and bust cycles that occurred in the near past. However, they do not have any estimate or a deadline perhaps, that when Pakistan shall achieve stable economic growth over 6 percent, without any current account deficit. Besides, in the recent past, the government has miserably failed to broaden the tax net on the earlier-mentioned sectors. The self-glorified Tajir Dost Scheme could be taken by academia as a case study for poor governance. Nonetheless, there are plenty of solutions to reform the economy, but the question is, ‘Are we willing to do that?” The fact is, the reforms are done collectively, Bonapartism is a myth.