A country’s Budget is a most powerful financial document of its kind. It is a tool to control future commitments with the available resources. An ideal situation for Financial Managers making a country’s budget is where revenues may be more than expenditures. This situation never exists specially in third world countries where resources are scarcer than requirements, creating a gap between both the ends and is termed as a ‘Budget Deficit’. This deficit is then needed to be financed through internal and external loans with a vision that this situation will not swell further. There are two ways to reduce this budget deficit once created and bridged through these loans. One way is to increase fiscal and monetary measures by controlling tax regime, tariff structures and interest rates scenarios whereas other but preferable way is to increase product base revenues. Fiscal tightening brings inflationary pressures which then may be countered by increasing interest rate through monetary policies. While increasing intangible ways to control deficit, revenues from Gross National Product can bring this adverse situation, for which loans were injected, back on track. For this purpose non developmental expenditures are controlled and economy may be set to become more export based rather than driven by imports through strengthening of local industry. In case of Pakistan, all governments relied heavily on intangible but easy to use controls like tightening of tax regime and borrowings from internal and external financial institutions. PTI came to power with an objective to bring change. This change was perceived by the nation where Pakistan will become prosperous in countable days. However, instantly this could not be possible where the prosperity was linked to subsidies which were financed through heavy borrowing. Throughout last ten years, budget deficit was on increasing trend and it seems impossible that any sooner PTI would be able to decrease or slow down this phenomenon. Matter of fact is that the previous governments took an easy way to relieve general public which was to increase subsidies that resulted in budget deficit and this whole process was bridged through loans rather increasing export based business activities. Export in last ten years declined as compared to surging import volumes. It created Trade Deficit which translated into Balance of Payment Crises eventually a huge Current Account Deficit (CAD). Due to subsidies and artificially controlling the Rupee devaluation, inflation figures lower down to as low as 3%. This helped previous regime in decreasing interest rate at half of what is being witnessed today. This entire scenario brought import based business activities which increased Gross Domestic Product (GDP). However, due to neglected export side, foreign exchange reserves, which should have been increased through exports, were controlled by injecting more external borrowing. Now this mess has created repayment emergency which PTI need to face together with growth prospective of the economy. This can only be possible through better budgeting techniques. If Finance Ministry is committed toward bringing down Current Account Deficit and to increase revenues while giving relieve to general public, it should widen the tax net instead of increasing tax rates Present government brought two mini budgets in 8 months to deal with this emergency. First mini budget was to bring Current Account Deficit down through fiscal measures and by curbing imports. Side by side monetary policy tightening started as well, which brought Discount rate to double digit. Second amended finance bill introduced by then Finance Minister Mr. Asad Umer for resuming business activities which otherwise was slowed down. The government successfully controlled Current Account Deficit but economic slowdown is so devastating that international financial institutions downgraded Pakistan economy by stating that the GDP would go down to around 3% from 5.75%. PTI reshuffled its cabinet including Finance Minister who was claimed brain of the party by party chairman Mr. Imran Khan to tackle this economic emergency. PM Imran Khan now brought in an experienced and qualified Financial Expert Mr. Hafeez Shaikh who is now responsible to make upcoming budget in a manner to achieve growth targets while giving relief to general public. According to recent statement of Adviser on Finance,Mr. Hafeez Shaikh, upcoming budget will focus on attaining sustainable economic growth by addressing gaps in the current account and fiscal deficit. He is also optimistic that negotiations with the International Monetary Fund (IMF) moving in a right direction and would help in providing a platform for macro-economic development in the country which will send a positive signal to other countries and international financial institutions about Pakistan’s commitment to fiscal discipline. He further stated that measures taken by the government resulted in the reduction of imports and increase in exports and remittances. Coming back to budget he claimed that solid steps have been taken to decrease expenditures and increase revenue. Duties on raw material imports would be reduced in the upcoming national budget and more relief would be provided to farmers and the business community, said Adviser to Prime Minister on Commerce, Textile, Industries and Production Abdul Razak Dawood. According to him the government is committed in turning the economy around and stressed that products manufactured in Pakistan must also be exported to earn foreign exchange. He further outlined that efforts are under way to enhance cotton production and achieve the target of 15 million bales next year which is requirement of Textile Industry and can bring input cost down. It seems that while Advisor to Finance making a controlled budget through fiscal measures, Advisor on Commerce and Textile is focusing on export based economic growth. But it is a fact that proper budget calculation will result in making better decisions towards prosperous future. In a state of economy where high interest rate and double digit inflation prevail, budget makers to be more careful towards money supply. If short of liquidity controls inflation it can be dangerous for growth of business activities funded by Bank Borrowing. In this scenario Large Enterprises inject owners’ equity to avoid finance cost whereas Small and Medium Enterprises (SME) stop or limit their operations. If growth of large enterprises is essential for increase in Export volumes and bringing foreign exchange, SMEs are important to curb imports reducing foreign exchange leakages. Large Units require certain import of raw material and spare parts which if available locally can bring down import volumes whereas general consumer behaviour if shifts toward local alternatives, it can reduce dependency over imported items or those provided by Multi-National Companies (MNCs). If Finance Ministry is committed toward bringing down Current Account Deficit and to increase revenues while giving relieve to general public, it should widen the tax net instead of increasing tax rates. It seems increasing tax rates imminent for shorter run but it is advisable to pass on this pressure towards Direct Taxation rather widening the range or percentage of General Sales Tax. This will result in a control over inflation where purchasing power of poor people will not be disturbed. Despite of pressures from other political parties, a consensus is required for Tax collection through one window operations. It will not only simplify the tax regime but better tax collection and its utilization will be observed. More interest rate hike and devaluation of currency will halt business activities and bring further economic slowdown. Instead, preferential interest rate scenario should be promulgated for industries, including agriculture, participating not only in Exports but for those as well which can be helpful for bring down foreign exchange leakages as discussed earlier. Ease of doing business may further be achieved by relaxing corporate governance laws. Foreign Direct Investments and MNCs are very important for shorter run where Foreign Exchange reserves are on depletion however for longer run MNCs to be regulated in such a manner that they may use local raw material instead of importing the same by better quality control implementation for availability of such product according to international standards. Recently, PepsiCo procured Potatoes from local market which is very encouraging for local farmers who got better price for their product. Moreover technology shift may be requested to MNCs in a certain time frame so that Pakistan may be able to produce such products locally. The writer is an Economist, Corporate Finance Specialist and a Chartered Banker UK