All eyes were on the government as it passed the federal budget 2020-21 amid the coronavirus pandemic. The outbreak has impacted the entire world. Even the most developed countries, and Pakistan could certainly not, escape the economic consequences.
The budget for this year is being called the ‘corona budget’ and hence a hefty amount of Rs70bn has been allocated for a special programme to mitigate the effects of COVID-19. The government has referred to it as a ‘relief budget’ as no new taxes have been imposed amid the crisis. This will certainly keep the prime minister’s staunch critics from stating that it not a people-friendly budget.
Minister for Industries Hammad Azhar presented the budget in the absence of a full-time finance minister. He appeared optimistic that the country continues to suffer from the virus but has not given up and will continue to take action to lift the economy affected by lockdown restrictions and a dip in economic activities.
The government is hoping to pull the economy from the negative 0.4 percent contraction and is aiming for a 2.1 percent GDP growth rate next year. The fiscal deficit dropped a whopping 73 percent but that is due to the decline in imports amid suspension of trading activities. The worrying thing is that the revenues have fallen, tax targets have missed and national income has fallen.
It is still difficult to quantify the real impact of the pandemic on the economy but the statistics and analysis paint a sordid picture. There is also uncertainty on the intensity and duration of the pandemic and it is likely the impact will continue until the next year. The government would broaden its tax base to increased revenue as it embarks on a long road to recovery.
Prime Minister Imran Khan was present in parliament during the budget speech, prompting members of the opposition to create a ruckus and raise slogans. The government maintains that it inherited a troubled economy and reforms were showing result before the pandemic hit.
Opposition Leader Shehbaz Sharif termed it unrealistic and said it was not a prescription for the troubled economy. He stated the government cannot hide behind the corona pandemic, while PPP said it was not a budget for a country facing a crisis. Political leaders aside, economic analysts and even the people will agree that the budget is justified under the present circumstances.