Daily Times

Now that the so-called mini-budget and SBP amendment bill have been cleared, the road from here to the next election will be an instructive one; both for the people and the government. Inflation will stay stubbornly high for the next couple of quarters, at least, but the government will lose points not just because of the prices, but also because it wasn’t up front and honest with the people about the fallout of accepting IMF’s prior conditions. Finance Minister Shaukat Tarin refuses to accept that cutting subsidies and adding taxes is going to add to the financial burden on common people. But he also said, when he gambled with a very expansionary budget, that there would be no need for a subsequent finance bill and also that he would bring the Fund round to his point of view.

Neither of those things happened, in fact, which means that the budget document that was going to govern the entire fiscal is already no longer relevant. But nobody saw any acceptance of failure on the part of the government. Instead, it has stuck to its earlier position that all concessions that are being made have in fact been forced onto the economy by the incompetence and misgovernance of previous rulers. What people will note, however, is that the government promised that the prior actions would not have an inflationary impact on their lives, but took to blaming others when they did.

This is going to have consequences all the way to the next election. Surely the opposition can be counted on to milk this for maximum advantage; pointing out how the government isn’t good for its word when it comes to the economy. Considering all this, it would have been far better to be honest and transparent with the people about the likely impact of the mini-budget. Hopefully the government will learn this lesson sooner rather than later. Already electricity and petrol prices have increased further even though the impact of the finance bill hasn’t yet started showing. After all, if the people don’t know what exactly they are in for, how can they prepare for it? *