Opinion written by Muhammad Taimur Fahad Khan
The National Budget for the fiscal year 2019-20 was presented before the National Assembly of Pakistan on June 11, 2019. It was successfully passed by the majority vote in the Friday session on June 28, amidst strenuous opposition. This budget is different from the preceding budget of the year 2018-19 on many levels. The gross federal revenue which is expected to be generated is Rs. 6716.4 billion, and is 14% greater than the total revenue target in the last budget which was Rs. 5661 billion. Although both budgets have one thing in common, that the major chunk of their gross revenues depend upon tax collection. But, in the year 2018-19, the total tax collected was only Rs. 3661 billion, which was Rs. 2 trillion less than the targeted amount. This poses a serious challenge to the current government to live up to the high expectations it created for itself among the people. But the current premier Imran Khan understands it, which is evident from his effort to keep Federal Board of Revenue (FBR) and Federal Investigation Agency (FIA) under his control so that corruption can be curbed and maximum revenue be generated.
The government has allocated Rs. 1.15 trillion for defense spending, which is the same as that of the last year. In a statement produced by the PM Imran Khan, it was mentioned that the army ‘voluntarily’ cut down its budget in order to assist economy in such difficult times. This shows the army’s devotion towards positive contribution in the country’s economic struggle. A statement released by the Inter-Services Public Relations (ISPR) office later stated that this cut down in military budget would not compromise national security; neither would it compromise on its efforts towards rebuilding Balochistan and FATA (which is part of KP now). There is a need to comprehend how gigantic this compromise is, given the constant and emerging security threats in the region. According to SIPRI, Pakistan’s defense spending is 20th largest in the world. Although the numbers seem impressive, but the fact that this military preparedness is against an archrival such as India, whose defense budget rolls up to US$ 63.6 billion. Moreover, the army has to perform on multiple fronts; external borders and internal domain (fighting terrorism, humanitarian assistance during natural disasters, election duties etc).
The government allotted Rs. 1.863 trillion for Public Sector Developing Program (PSDP) which is almost 35% of the total budget. It is very rare that such a large proportion of the national budget is given to the development sector. Moreover, special funds have been appropriated for Sustainable Development Goals (SDGs). Both these projects cover education as a top priority, but there is a separate budget allocated for education as well. Although after the 18th Amendment, education sector is a provincial matter, but on a Federal level, higher education is paid due attention because the government understands the need for educational reforms. Moreover, the fact that the army has cut down its expenses shows a change of approach where human security is given as much priority as traditional border security.
Poverty alleviation remains a staggering challenge to the government, where around 50% people live below poverty line. The government has allotted Rs. 200,000 million for poverty alleviation and other social schemes in PSDP. Housing schemes which will provide shelter to millions of poor people have been inaugurated by the PM. Custom duties on medicines have been removed so that they are easily accessible. After all these efforts and one can easily say that the government is trying its best improve the living standard in the country. Even though there are critics who work hard to build a public narrative against the government’s efforts to improve economy, they deliberately fail to comprehend the quicksand the economy was already in when the current government inherited it. Only in the span of the last ten years, the national debt per person has spiked from around Rs. 30,000 to Rs. 70,000. They criticize the government for the rising rate of dollar, which recently reached its highest up to Rs, 167, but the government has defended it openly how artificially floated rate of dollar was against the long-term national interest. The amount of transparency which the current government promotes is highly in line with the ideals of democracy. The PM sits on the national television and seeks patience from his people for the betterment of the national economy in the long run. The most disturbing fact in this is that the educated, privileged and liberal class is the one protesting the loudest while the poor seem to understand the essence of time and patience for a larger goal.
Another positivity that is visible in the government’s working is the change in the attitudes of the leadership. A true leader leads by example. The current PM initiated an austerity campaign and started it by first minimizing his own expenses and luxury. The government asks donations for Diamer and Bhasha dams but first the several ministries donated their one month’s income to the fund. All these examples are thus stated to promote a narrative that all parties, the state, army and the civil society are together in this joint venture to curb these difficult times of economic crises.
In many more dimensions, the efforts of the government are visible. In order to maximize tax collection, the government has launched Amnesty scheme and because of the load of the people coming out to make everything they own white, it has extended the deadline of the scheme to three more days. But, it takes a lot of working behind such a massive mobilization of people. It took reforms on institutional level, it took reforms in the bureaucratic order to make such an administrative system. National Accountability Bureau (NAB) and FBR have a documented records of all declared and undeclared assets and it will scrutinize held accountable accordingly.
Although the government is doing a tremendous job on the economy, which is evident from the annual budget, many sectors have either been ignored or paid less attention than they require. The GDP is expected to be lower than the last year because around 40% of the annual budget is appropriated for loan and interest payments, and less on domestic production. A new deal with Saudi Arabia has been signed to import oil and it will be favourable for the industry sector, but more needs to be done in the industrial domain. 43% of Pakistan’s land is arable land. It is the second largest producer of Cotton in the world, but the contribution of agriculture in the national income has reduced from around 25% to around 15%. The farmer is the most poor and depressed in the country. The government has allotted only Rs. 225 million for agriculture sector, which is not enough to bear expenses of water production, advanced technology etc. The health, education and environment are three most crucial domains that are neglected. But, the point is that these become secondary needs when the people lack primary needs such as food, water, shelter etc.
CPEC is a game changer, truly. It has brought many opportunities for development and growth to Pakistan from infrastructure development, energy production and the provision of jobs to thousands of Pakistanis. If the plans for Gwadar port are executed properly, it can make Pakistan richer than it ever expected, because the natural tendencies and the benefits the port offers can make it successful, comparable to the neighbouring Arab ports in the future. For it, we need to create a market-friendly atmosphere in the country which encourages investments. In seminars conducted on CPEC, major emphasis is put on the need for creating special economic zones for easing and alluring large investors. As Marx puts it, “open-markets lead to democracy”. It is the western belief that economic welfare always leads to political changes that ultimately lead to democracy. So, if we follow the Western model, it is all interconnected at the end.