On May 10, 2016, this column informed how and why the government is expected to present a populist budget; the spate of news since then only confirms that thesis (See Budget Oracles; May 10, 2016), though admittedly it is a cause of worry.
History and hindsight suggests that the closer it gets to the run-up to the next general election, the higher will be the development spending. However, it is not that simple; the process of determining Public Sector Development Programme (PSDP) allocations for 2016-17 became more complex as the debate over next yearâ??s PSDP gained heat with the Ministry of Finance and the Ministry of Planning, Development and Reforms not agreeing on the aggregates.
Come April and once again the country's sugar exports have dropped to zero as the export subsidy expired in March. Meanwhile, our existing stock of sugar is currently enough to last till January 2017, the Chairman of PSMA told BR Research. With the budget almost here, there have been a series of FBR proposals lately, none of them good for the mills.
If all goes well, the Pakistan Telecommunic-ations Authority (PTA) would auction a 10MHz spectrum block, reportedly, on June 20. But is all well? Depending on who you are talking about, there seems to be little to no appetite among operators for additional spectrum at this point.
Few, if any expect the PML-N government to present a revolutionary budget for 2016-17 so no surprises when sources say there might be a significant bump in fixed duty on imported used cars. Fixed duties were previously increased in 2014 and 2015 to amount in dollars as opposed to the prevalent ad-volerem tariff structure that takes into account the value of the import product in question. Some would tell you an increase in duty for used imported cars is important because the new auto policy is inviting new entrants, the likes of Fiat, Audi or Volkswagen to set up shop here. A surge of used cars would hurt that potential. Plus there is always the idea that imports, any imports are bad.
The dearth of financing available to small and medium business owners leaves them gasping for some influx of liquidity. Most SMEs therefore rely on friends and relatives or trade creditors for financing arrangements. However, to plug in this financing gap venture capital can be utilized to provide SMEs funds to transform them into internationally competitive firms.
Amid the GDP growth targets, the CPECs, and the budget allocations, its important to remember a more salient matter of this developing economy - one that isnt as much a part of the national dialogue as it should be: Education. Never mind the lack of prioritization, the unavailability of reliable data itself should be enough to deter any potential policymaking decisions (not that there are any in sight).