It is now less than a month before the government passes the budget for the next fiscal year on June 11. We have heard the oft-repeated statement from the prime minister that relief for masses in on the way and the next budget will emphasise on development projects.
The prime minister has a new economic team this time around led by veteran banker Shaukat Tarin. He seems to be a sharp critic of the influence the IMF yields on macroeconomic and public policies. The premier has repeatedly said that economy is on the right track but Tarin disagrees. He believes Pakistan cannot remain economically stagnant and will require robust growth of 5% for next few years, or else it will be at “God’s mercy for the next four years.”
It is unusual to see a finance minister who is a staunch critic of the IMF placing himself at loggerheads with the global financial institution. The minister is also perturbed that IMF is urging for increase in power tariffs which is leading to inflation. Nevertheless, he agrees that tough decisions are required to revive the economy and that they will explain the situation to the IMF.
The PTI will be presenting its third budget this year. It would be banking on the new economic team to provide relief but how exactly will it be delivered remains unanswered. The economy is still in the midst of a pandemic which has hampered growth. How exactly does the finance minister expect to boost growth rate, reduce circular debts and also convince the IMF? There will certainly be a huge policy shift from his predecessor who were more concerned with stablising the economy.
The next budget is expected to see an increase in public sector development programmes so that all provinces have opportunities for economic growth. The federating units have also been tasked to rationalise expenditures ahead of the next budget. The finance minister is seeking to widen the tax net, rather than increasing the rates. It is necessary to keep the momentum going rather than revamping the entire economic policy. This will require the cooperation of the IMF if Pakistan is to achieve the set economic targets.
