Daily Times

The 2018-19 budget announced by Mr Miftah Ismail on April 27, 2018 has elicited heated debate in and outside Parliament. On top of Mr. Ismail’s questionable status as federal minister and the lack of a mandate for presenting a Finance Bill for the entire year, the budget also lacks a redistributive policy. It is, moreover, bound to widen the already petrifying rich-poor divide in Pakistan.

Our budget-makers have never bothered to study the economic models of countries that have succeeded in eradicating poverty. Our budgets, moreover, are ritualistic ones, lacking any welfare programs that could help those lagging behind, or that could enable the downtrodden to attain social and economic mobility.

Budgets in welfare states ensure redistribution of wealth so that everyone can fulfil their fundamental needs. On the contrary, successive governments in Pakistan have provided the rich with unprecedented opportunities to keep amassing wealth. They have done this through governments’ fixation with pro-rich tax policies and the elitist nature of our economy.

Miftah’s budget, unfortunately, is no exception to this trend. Providing the budget is not just a book-keeping exercise. It is supposed to highlight the socio-politico-economic policies of a government. Since coming into power for a third time in 2013, the Pakistan Muslim League-Nawaz has simply failed to pay any attention to structural reforms such as replacing dysfunctional judicial and administrative apparatuses, and dismantling elitist economic structures.

How can federal and provincial finance ministers who make our budgets fail to ignore the fact that 42 percent of Pakistani girls fail to complete their primary schooling, while only 1.6 percent in the age group of 15-49 own any property. Moreover, the ratio of female to male youth unemployment in the age bracket 15-24 is 164 percent. At least 25 million children are out of school, while around 60 million live below the poverty line.

It is, however, heartening to know that this federal budget proposes, for the first time, to tackle the challenge of 40 million undernourished children by designating funds worth Rs 10 billion for this purpose.

The conversation over the present budget is centred on quantitative aspects such as the burgeoning fiscal and current account deficits and an unsustainable debt, but fails to discuss equitable growth, jobs and decent wages for all.

Debates over the budget on any TV channel also ignore Article 3 of the Constitution as a cornerstone of our economic policy. This clause states: “The State shall ensure the elimination of all forms of exploitation and the gradual fulfilment of the fundamental principle, from each according to his ability to each according to his work”.

This year’s federal budget contains no stipulations that could fulfill the promises made in Article 3 of the Constitution. Moreover, this is simply not possible because today’s Pakistan is a captive of the military-judicial-civil complex, the landed aristocracy and the industrialist-turned politicians.

Why has the Supreme Court not taken suo moto action over decent wages for all? Can we expect a suo moto in the future over why the rich continue to reap unprecedented tax benefits while the poor continue to be oppressed by the burden of indirect taxes?

A just budget is one that emphasises social mobility and one that has both short and long term goals to deal justly with all economic classes within society. Thus, we need a new policy framework for our budget that ensures prosperity for all and not just for the privileged classes.

Currently, Pakistan’s economy serves the privileged classes which represent less than 1 percent of the entire population. Mighty landowners, moreover, continue to exploit the labour of landless tillers, while unscrupulous industrialists and traders exploit poor urban workers.

The Economist in 2006 published two studies showing how Nordic countries achieved social mobility and economic justice by taxing the rich to raise money for a welfare state. These policies alone, however, were not enough to bring positive results.

These countries’ also succeeded because of their superior education systems. Education has long been recognised as the most important single impetus for social mobility — and all four Nordic countries do unusually well in the school-appraisal system. Our budget makers at both federal and provincial level, however, have failed to establish education systems that can uplift those at the bottom. Thus, if we judge the economic policies of our governments in the perspective of Article 3 and Article 25A — that guarantees education for all — of the Constitution, they turn out to be simply loathsome.

From this perspective, this year’s budget is just another routine exercise of balancing the books. Pakistan needs meaningful redistribution policies that can uplift the downtrodden. There is nothing in the present budget that takes us towards this goal. Thus, like all previous budgets, it is just another disappointment.

The writer is Advocate Supreme Court and Adjunct Faculty at Lahore University of Management Sciences (LUMS). Email: ikram@huzaimaikram.com; Twitter: @drikramulhaq

Published in Daily Times, May 6^th 2018.