The FY22 budget

Stunned. Stuttering. Stumbling. These are the three words that aptly describe the opposition in Pakistan. The budget was announced. Shouting, cursing and sloganeering went on. Placards talked about the poor man being hit by the budget, etc. While they were chanting about the poor being ignored, the finance minister was announcing the “most comprehensive” socio-economic package for the poor in the history of the country. Later on realizing this the opposition sheepishly started talking about the budget being a fantasy budget. Which means they conceded that it had something for everybody but said that it will not be implementable. Unfortunately, the opposition leader started his speech again by talking about “nothing for the poor”. Is it a lack of comprehension, competence, or intelligence?

The fiscal year 2021-22 budget is a unique budget. It talks about the very poor and the middle class. It provides for the basic needs of the masses. It covers agriculture, industry, services, manufacturing and exports. It talks about short and long term. It talks about the sick and their needs. It takes into care jobs and skills. It covers all provinces and their unique requirements. It does not impose new taxes. It does not raise tariffs. As such a budget has never been witnessed before it is being termed impractical. The only questions raised on it are where is all the money going to come from to finance these projects.

But what everybody is missing is that this is a transformational budget that has changed the direction of the way the country’s future is planned. Traditionally, it was a balancing the book exercise headed by accountants like Ex finance minister Ishaq Dar who was always trying to do entries of debit and credit. This budget is different on 6 counts:

1. Vision governs the money bill- Previously it was money that governed the budget. Total possible tax collection and its fitting in with the International Monetary Fund (IMF) prescription. It used to be the book keeping method of making a balance sheet. This is the first time that vision has been the overarching direction for allocating resources. Then the mission decided the type of projects that helped achieve the vision. For example, the vision of a welfare state meant that primary consideration should be given to the absolute poor of society. Initiatives like interest-free housing loans, interest-free business loans, health card and skill building for jobs in local community were planned to provide the basics of welfare to the poorest 40 million households. The last part was the money bill. The highest ever allocation was made to Ehsaas programme of Rs 260 billion. This reflects the transformational journey. Vision, mission, and then the budget. If the poor in a welfare state are the priority, then the poor will be the first priority receiving the highest budget.

2. “Make in Pakistan” focus- Pakistan had become a trading base. Products were imported and sold and resold. Agriculture and industry had been negatively hit by the book keeping methodology of budgeting. Pakistan grew at 5.5% in 2018 but had a huge import bill and exports that were not even at the 2013 level. With the result that a $ 19.2 billion trade deficit was formed. Pakistan had become an importer of food items like lentils, sugar, wheat, etc., despite being an agri-based economy. This budget is planning to completely reverse the direction. Import duties on raw materials have been removed on inputs of chemicals, pharmaceuticals, food items, etc., to encourage local production. This will help the industrialization process and create jobs and exportable surplus. Duties on electric vehicles and components have been removed to encourage SMEs to start small businesses of electrical batteries and components for the electric vehicles.

3. Geographical equity- Previous budgets were show case metro city focused budget. For long Lahore received 58% of Punjab budget. Southern Punjab was totally neglected. This budget is specially focusing on the underdeveloped areas. Aside from Punjab, Balochistan’s poorest districts have been put on an accelerated development plan. Sindh development plan includes not just Karachi but a separate plan for 14 poorest priority Sindh districts. Ex-FATA merged with KP districts has received 130% more allocation in the last three years and remains a priority in this budget.

4. Freedom from farm slavery- The farmer was the most exploited person in the agri sector that comprises 60 percent of our economy. He would not get adequate support prices, was squeezed by the middlemen and oppressed by the landlords. His capital and credit needs were hardly ever given importance. Thus, he was enslaved by his dependence on the banker, the buyers and the middlemen, while getting low returns for his investment. This had led to Pakistan becoming a net importer of food items. With farmers getting handsome

support prices, this year has seen six bumper crops. To free him from the clutches of creditors and “aarthi” government has introduced interest-free loans for each farmer worth Rs 300,000 a year. Each farmer will get a further Rs 200,000 for buying agri equipment. Small farmers will be eligible for Kissan Card for subsidized inputs. But the most important. Cold storage chains will be established throughout Pakistan to give farmers access to market eliminating his slavery to the middlemen.

1. Social development is the real development- This is the real star. Education, health and environment. The social sector allocation that was 11% in 2016-2017 has increased to 20% as of 2020-2021. Higher education budget has more than doubled in 3 years. The most stark difference is environment. With hardly any focus on it for two decades, it has now increased to 16 folds compared to the last five years. These are areas Pakistan was notoriously negligent about. Pakistan due to its environmental focus was requested by United Nations Environment Programme (UNEP) to co-host the World Environment Day with United Nations on 5th June 2021. PM Imran Khan was honoured to Chair the session that included speakers like British PM Boris Johnson and Chinese President Xi Jingpin.

2. From next election to next generation- Water and electricity have plagued Pakistan’s development. After Mangla and Tarbela no big dam has been constructed by any government. The reason being that a dam will take a long time to be build while politicians normally focus on short term projects like roads and transport. The government is building three mega hydel dams – Dasu, Mohmand, and Diamer-Bhasha – and 10 smaller dams to take care of the grave water crisis looming in the future. As James Freeman Clarke says “The politician thinks of the next election, the statesman thinks of the next generation.”

Crisis, for the ordinary, is a breaking point; for the extraordinary, it is a rising point. Who would have thought that a country in the back and beyond of health and economic global map will emerge as a leader in handling corona and economy? Who would have thought that the likes of the mighty US and India would be facing a crushing virus and crashing economy? But then that is difference between a tunnel vision and leadership with foresight. While Modi and the world went for curfews and total lockdowns, PM Imran Khan took the tough, unpopular and lonely decision of smart lockdown. He had the courage to choose the untraveled road. This battle is still not over. But the light at the end of the tunnel is there. As they say “Vision is to be able to see the sun before it shines”.

(The writer can be reached at [email protected]. She is a Pakistan Tehrik-e-Insaf (PTI) Member of National Assembly. The views expressed in this article are not necessarily those of the newspaper)

Copyright Business Recorder, 2021