Reports that the government is no closer to a deal with the IMF, and that next year’s budget is going to be harsher yet if the bailout program is to be revived, must be counted as a serious setback for the ruling coalition. The budget must be passed by parliament by June 28, 2022, to be effective by the next fiscal year, which begins on July 1, 2022. So there’s really no telling just what it plans to pull out of the hat to settle this matter over the next two or three days. Otherwise, the staff-level agreement will just not come in time for things to work out. Not surprisingly, it is the income-expenditure trade-off that the Fund is not too happy with. And it doesn’t help at all that provinces’ projections of their own surpluses or deficits do not match the centre’s. That makes for a tough situation indeed because it cannot realistically expect provinces to record surpluses when they are in fact headed for deficits, it cannot get the Fund to bring down its own revenue projections, and there’s no way the central government can improve overall earning all by itself. That’ll leave no other choice but to meet this revenue emergency by cutting more development spending and raising more taxes before the budget is eventually passed. That’s very bad news from the people’s point of view. Sure, they don’t have much choice but to gulp whatever austerity the government is forced to shove down their throats, but there’s also a lot of extra pressure from PTI, which is salivating for just such circumstances so it can sell its narrative better to its supporters. Surely the government realises that all will be lost if the budget doesn’t work out, which means it must bring the Fund around in less than a week. That’s a tough ask, but without it, the government will sink under its own weight. *