The PTI government unveiled its third budget hailed by most economic analysts as satisfactory and an overwhelmingly people-friendly budget. The government is certainly looking to provide some relief in the last years before the next general elections.
The government can certainly afford to provide such concessions after it gave a massive fiscal stimulus amid the pandemic which boosted economic growth and productivity. The target for the next fiscal year has been set at an impressive 4.8% and the finance minister is confident it can reach even higher. The main focus has been on the trickle-down effect to put some money in people’s pockets and make them feel good about the economy.
The budget has mostly focused on growth after years of stabilization. The government has earmarked over Rs900bn for development projects. The biggest relief for the common man has been that no new taxes have been levied and there is no hike in power tariffs. This would have been as the IMF had been insisting on raising prices. The minimum wage has been increased to Rs20,000 per month while salaries and pensions have been increased by 10%. These measures would help in providing relief to the masses.
The total outlay of the budget at around Rs8.5 trillion is itself 19 percent higher than last year’s budget. Special development packages have been included to ensure the development of deprived areas and bring them at par with the rest of the country. However, all these efforts will only succeed based on revenue generation as the government has set an ambitious target of Rs5.829 trillion and has seen several FBR chiefs been replaced in the past few years.
The critics don’t have much to complain over the budget even though the opposition has dismissed the claims of sudden economic growth. The PPP claims that provinces have not been given their due share of resources. Of the four provinces, Punjab will get the largest share from the federal divisible, which is almost equal to the other three collectively. The government insists the share of the provinces have been increased by 24 percent but the divisions remain. It is imperative that such issues are resolved amicably.
The PTI will aim to woo the voters in the final two years of the government. The budget has certainly laid the ground for development which can propel the PTI back in power if the policies succeed. It is therefore essential that the people feel the effects of the relief which the government claims has been given to them.
