Daily Times

How does a government look when the de facto finance minister says, at the post-budget press conference, that he’s not really sure about achieving the revenue target? That, unfortunately, is not all. He also said that provinces should not make their budgets on the basis of the tax target and, since the centre has decided not to impose new taxes – which is itself contested – provincial governments should increase taxes and cut expenditure. And what does it really imply when Dr Hafeez Sheikh says that “provinces should make their budgets keeping in mind FBR’s (Federal Board of Revenue) past performance and difference between performance, projection and reality?” Isn’t the budget supposed to reflect both the performance of ministries and the reality on the ground? It is, sadly, just this attitude that has made the budget process both meaningless and unrealistic.

So the advisor to the prime minister has admitted, in no uncertain terms, that all the talk of reforming the FBR has yet to translate into any sort of meaningful action. If the provinces are not supposed to take cue from the centre’s revenue projection, perhaps they should resort to groping in the dark or, just like the federal government, opt for a budget that loses all significance as soon as it is presented. While some such answers were unsatisfactory, Dr Sheikh was also unable to answer a few rather important questions at all. For example, he didn’t have much to say about signing off on the Rs249 billion primary budget deficit target when his own ministry has projected the deficit at above Rs550 billion? Why, really, should the people see these numbers and expect that the government is acting in their best interest?

Strangely, Dr Sheikh also chose to stay mum about whether the IMF (International Monetary Fund) would now call a meeting to approve the second review of the Extended Fund Facility (EFF). The bailout program is suspended in light of all the stimulus packages needed because of the recent lockdown, but the government is clearly eager to get it back on track, which tells a lot about the hopeless nature of the budget. The government’s vulnerability is understandable. Without the Facility, it risks being bankrupt. But that does not mean it should throw a veil over facts and choose to keep people in the dark. Everybody understands that the present crisis is not unique to Pakistan, and growth and revenue will suffer in the immediate term. And it will be better if the government communicates all the facts to the people and earns their trust instead of taking them for a ride. *