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Pakistan: Mini Budget: irritating mass scale agitation

International Desk
|  26 Dec 2021, 17:59 | Update : 26 Dec 2021, 23:10
Pakistan: Mini Budget: irritating mass scale agitation
Photo: Collected
To seek approval for a massive package of new taxes for getting a tranche of $1bn from the International Monetary Fund (IMF), the khan government had summoned another session of the National Assembly, since Wednesday of the last week,

The ultimate regulator of the global economy didn’t feel good about the budget that a banker-turned-politician, Shaukat Tarin, had prepared for the current fiscal year. It politely refused to buy the feel-good narrative that Mr Tarin had boastfully been promoting regarding the state of our economy.

Presenting the annual budget in June this year, he kept insisting that Pakistan’s stunning growth in multiple sectors had rudely defied the doomsayers. The government wouldn’t want to break the growth momentum by introducing more taxes and relentless increases in the rates of electricity and gas consumption.Often, he also vowed to convey the loud and firm NO to do-more kind of suggestions by the IMF. Hardly three months after presenting the budget, however, he was forced to smell coffee.

The IMF also conveyed to him, pointblank, that Pakistan had already committed to enforce certain measures, presumably aimed at reforming and restructuring our economy by broadening and updating its tax network and the tools of revenue collection. To facilitate reaching there, the IMF also promised to provide $6 billion to Pakistan in the name of Extended Fund Facility (EFF) in various installments.   After getting the take-it-or-leave-it message from the IMF, Shaukat Tarin was finally forced to prepare Finance (Supplementary) Bill 2021. In popular parlance such a bill is called the “mini-budget,” the term, an incurably arrogant Tarin hates to own like the honest broker.  

 

Whatever you may call it, Pakistan now needs to go for a net fiscal adjustment of around Rs550 billion during the remaining months of the current fiscal year. It would require a huge withdrawal of tax exemptions amounting to around Rs360 billion, plus 22 percent cut in funds committed for development schemes.After many days of desperate tweaking of the budget-related figures, the government is now ready with the final draft of the mini-budget. Yet, it was not presented for the Federal Cabinet’s approval previous Tuesday.

 Reliable sources claim that the government was feeling shy of presenting the already prepared mini-budget for approval by the National Assembly. The shocking results of local bodies’ polls, primarily in areas of Khyber Pakhtunkhwa, considered invincible citadels of the ruling party since 2013, had seemingly forced the second thoughts.

 

Prime Minister Imran Khan and the huge brigade of his spin-doctors keep insisting that the ruling party suffered a rude shock in these polls due to selecting “wrong candidates.” But the second and third tier leaders of the same party, more attuned to the ground realities, candidly admit that the nonstop wave of inflation was the one and only cause of their stunning defeat.

Source: the nation.

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