What do the Finance Minister of Pakistan Ishaq Dar and the White Rabbit from Alice in the Wonderland have in common? They both love to talk a lot and since they are in such a hurry, they both often miss out on key details.
BR Research had previously pointed out a number of promises made by the PML-N in its Election Manifesto 2013 that were either missing or contradicted in the Federal Budget FY14 presented by that partys new government (see: BR Research columns for 14 June, 2013).
Now let us turn our attention to some more missing links in the governments fiscal plan for its first year in office. However, before berating the new government for its follies, one should note that the incoming government had only a few days after taking office, to complete the annual exercise of devising the countrys budget.
In his budget speech, the finance minister announced the governments intent to deliver the countrys youth from unemployment through a number of initiatives (seven in all) including a laptop scheme, graduate employment, youth skill development programmes, and discounted loans for small businesses (with government paying the interest rate differential).
But what the minister missed in his two-hour address was any mention of how the government intends to fund these PM initiatives. A study of the budget documents also fails to address this curiosity. Hopefully the detailed budget documents will shed more light on the matter.
But despite the lack of time, the wizards at Finance Ministry seemed to have enough time to pull a fast one on the people of the country. Amid applause from the few environmentally conscious ones among us, Dar announced tax-free, duty-free imports for hybrid cars up to 1200cc. So whats the trickery here, you ask? There are no hybrid cars with engine capacity of under 1200cc, currently available in the international market.
Coming back to the forgetful Rabbit analogy, Dar also announced governments intent to phase out blanket subsidies while beefing up targeted subsidies. He announced expansion of the Income Support Programme and the usual subsidies for food items sold through Utility Stores Corporation during Ramazan. But there just wasn enough time to factor in any reductions in the blanket subsidies such as those on electricity and gas.
Even though FBR failed miserably at meeting its revenue collection target, even after it had been revised downwards in the outgoing fiscal, the government has targeted a steep growth of more than 20 percent in gross revenue receipts for FY14.
Perhaps one would have to jump down the rabbit hole and into Wonderland at Q-Block to find out just how the babus at FBR will be awakened with a newfound sense of urgency to achieve this ambitious goal.
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