With the already precarious and struggling economy to make ends meet, the masses are braced for yet another budget bomb. This is the first full year budget by the incumbent government of the Pakistan Tehreek-e-Insaf (PTI). Not discussing the other sectors, but the ones that the PTI promised when it was in opposition, and voiced its slogan of investing in education, health and human capital.
The government has allocated Rs 77.262 billion for education affairs and services for 2019 against Rs 91.55 billion previously in 2018-19. This decrease in allocation of education budget is a question mark on the PTI government whose mandate promised to make the education sector more advanced and research based. That now seems like a distant dream through this low budget allocation for the sector.
Likewise, the budget of higher education has also been decreased from Rs 35.8 billion to Rs 28.6 billion for next fiscal year. The cut in the higher education budget may become a hindrance in the already problem area of research in universities, and will ultimately cause problems in the system of higher education. The country is already facing brain drain, and this cut will add more miseries.
The government has allocated Rs 13 billion for health sector for the fiscal year 2019-20 against the allocation of Rs 25 billion for fiscal year 2018-19 under the PML-N government. This budgetary cut has significantly impacted the health sector that already faces many issues.
There is absence of schemes for the youth, and human capital has remained an untouched subject in the budget session presented by the PTI.
The ‘tsunami of change’ has transformed into a ‘storm of inflation’ in just nine months of the new government.
Economic indicators, both at the macro and the micro level, are nothing to write home about. Alarmingly, rupee has continuously plummeted to an all-time low against dollar; foreign exchange reserves are distressingly low; exports have only marginally increased despite a massive depreciation of the rupee; bears continue to dominate the stock market due to uncertainties over government’s economic policies and in the political arena; the central bank’s interest rate has gone up to 10.7 percent; and a cut in the development outlay in the full year budget is feared to bring down the economic growth from 5.8 percent in the last fiscal year to something around 3.4 percent in the on-going one.
There is absence of schemes for the youth, and human capital has remained an untouched subject in the budget session presented by the PTI
Household budgets too have taken a huge hit. While power and gas tariffs have undergone big hikes, the trickle-down effect of the falling oil prices in the international market has been too small. The rise in the value of dollar has its effects too: prices of medicines have already gone up by up to 15 percent, and those of many other imported items are anticipated to rise.
Adding to all that is government’s anti-encroachment drive that has resulted in huge unemployment, and that too at a time of increasing hardships. A large economic adjustment has to be undertaken. Revenues have posted zero growth while expenditures have grown by almost eight percent. Even the shrinking of the current account deficit by 27percent from last year is not as encouraging a story when one sees that much of it owes to the shrinking furnace oil imports, along with a handful of other items. Exports have posted zero growth as well, while foreign investment has fallen by almost 50percent.
It now remains to be seen what strategy the government intends to follow to help mitigate the impact of this awful situation on the poor. We can only hope that something more than cosmetic measures will be undertaken for that crucial objective.
Aside from the budget that has created unrest in consumers as well as investors in the country, the current government has been facing a severe governance crisis as well. Keeping the opposition leaders behind the bars when the country is facing a huge economic crisis will further ignite the masses, and the opposition parties may use that aggression against the government. Undoubtedly, there is need of accountability but it must be across the board. Selected accountability and jailing the opposition leaders only put doubts on the system of accountability under the sitting government. If this happens, and the politics of dharna (sit-in) starts, a precedent set by Imran Khan himself in 2014, the country may fall into an abyss of a crisis.
Any kind of anarchy will lead to nothing but deterioration of an already floundering economy, and confidence of investors will be lost. The government needs to reconsider its strategic policies and politics that may result into a prosperous and progressive Pakistan.
The writer is sub-editor at the Daily Times. He is graduate of School of Economics, Quaid-I-Azam University, Islamabad