Saturday, October 23, 2021

Comment: Budget 2015-16 is an impressive plan, if implemented in letter and spirit


Budget 2015-16 has been unveiled for all to see, comment and critique on. Owing to our traditionally cynical approach of disregarding every government’s performance, economic analysts are having a field day bashing Finance Minister Ishaq Dar’s budget.

Let’s start off with the basics, shall we? Since Pakistan has become a sovereign state and obtained the privilege to enact and pass its very own budget, fingers have been pointed at the defense budget (which always takes away the largest piece of the pie). This year as well, Pakistan’s defense budget has recorded an 11% increase from last year’s enormous Rs 700bn, to arrive at Rs 780bn. ‘Books not bombs’ might seem to be a popular, effective slogan but does it necessarily pertain to a country involved in an arms race with a hostile neighbor five times its size and fighting an insurgency that threatens its very own existence? Operation Zarb-e-Azb has indeed broken the militant’s back and demoralized them to a great extent (leave aside a few tragic incidents of cowardice, such as the APS massacre and Ismaili bus attack) things have certainly been kept from spiraling out of control. And yes, we have the military and their enormous budget to thank for it.

One does not and most certainly cannot talk about the dismal increase in education and health sectors without cringing. Enhancements in these two sectors seem to be the need of the hour, if a country wants to transform itself from a third world country into a developed country. Yet a meager 71.5 million allocation for the Higher Education Commission is an abysmal approach to tackle Pakistan’s illiteracy woes. Casting aside a scanty amount of Rs 11.1 billion for the health sector is disappointing in itself.

There’s much hope for the common man though, if he were to realize it. Starting off with the increase in minimum wage from Rs 12,000-13,000, we arrive at the salaried class. The salaried person, whose taxable income fall under the income segment of Rs 400,000-500,000 were taxable at 5% previously, will now be charged at 2%. Non-salaried persons have also been granted relief as they will now be taxed at 7% as opposed to last year’s 10%. Per capita income has also registered an increase from $1384 to $1512 in a span of one year. For those patients who have contracted serious and contagious diseases, the Prime Minister’s Health Insurance Scheme will provide medical aid. For this scheme, Rs 9 billion have been allocated.
PML-N, who used to criticize the Benazir Income Support Programme initiated by the PPP-led government, has increased the allocation for BISP by a whopping Rs 102 bn! The move will now provide relief to 31 million people as opposed to 5.1 million poverty-stricken citizens. A further Rs 100 bn has been cast aside to aid the Internally Displaced Persons.

The energy sector has also been taken care of in the budget. Allocating a sizable-but-not enough amount of Rs 248 billion, the Finance Minister announced (to the sound of thumping desks) that the menace of load shedding shall be eliminated come December 2017. Not the first time PML-N has made faulty claims in grappling load shedding, mind you. Cosmetics, mobile phones and cigarettes will now be more expensive for the public to purchase on account of the increased FED and sales tax but relief has been granted in the purchase and sale of vehicles, houses.
Rehabilitation of railway tracks and adding additional locomotives to the existing stock was also proposed by the Finance Minister. A Green Line Bus service project has will be initiated soon, and for that Rs 16 billion have been set aside.

All in all, the total budget has an outlay of Rs 4.33 trillion and the growth target has been fixed at 5.2% for the fiscal year. A day before, the economic survey had revealed that inflation had stooped down to an all time low at 4.8%, the lowest in 8 years. Though the current government, spearheaded by Prime Minister Nawaz Sharif has set forth an ambitious budget, more could have been done to reduce prices of necessities. The government has done well in setting aside huge chunks of funds for energy, transportation and defense sectors, yet transparent implementation remains the key to providing effective governance. Compared with the previous Gillani-led administration, Pakistan never saw completion of ambitious projects but reeled from massive kickbacks received and billions laundered in the name of integral projects, such as Rental Power Plants. We expect better and more from Prime Minister Nawaz Sharif and it is apparent that under the current turbulent and tumultuous circumstances, this budget has the ability to turn Pakistan’s economy around for the better.

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