EDITORIAL: Federal Minister for Foreign Affairs and Chairman of Pakistan People’s Party (PPP) Bilawal Bhutto-Zardari while addressing a public gathering in Swat had warned that “if Pakistan Muslim League-Nawaz (PML-N) wants the PPP to vote for the budget then it’s not possible without allocating funds for flood reconstruction.”
And, reportedly, like other stakeholders - 10 coalition partners, he disassociated Prime Minister Shehbaz Sharif from the charge by adding that “we have no doubt over the intentions of the Prime Minister as he witnessed the destruction with his own eyes.
However, we would like to ask him to introspect within his team and hold those hindering this process accountable. We hope that Finance Minister Ishaq Dar and his team will address our concerns and work towards resolving them.”
Planning minister Ahsan Iqbal, subsequent to Bilawal Bhutto-Zardari’s speech, urged the coalition partners not to publicise criticism but to sit in the cabinet to discuss and reach an amicable solution.
Although the incumbent finance minister had not returned to the country till 24 September 2022, well after the floods had begun to subside, yet it is simply unfathomable that he was not fully cognizant of the scale of destruction wrought by the floods in the summer of 2022.
In his 9 June 2023 budget speech, he noted that “last year the people of Pakistan, especially Sindh, Balochistan and Khyber Pakhtunkhwa faced the disaster of floods.
The property and economic losses are estimated to be more than 30 billion dollars. The federal and provincial governments actively participated in the rehabilitation and resettlement of flood-affected people,” adding that 2 trillion rupees was extended as Kissan package (31 October 2022) with the bulk of this package, 1.8 trillion rupees, as loans.
He did not specify the exact amount of loans extended by the commercial banks though he claimed in the budget speech that the package resulted in farm sector growth of 1.2 percent (bumper wheat crop) – a growth rate that has been challenged by many an independent economist who cite a significant portion of the 30 billion dollar loss sourced to floods to the farm sector.
In other words, the budget speech claims to have appropriately dealt with flood relief efforts and in this context Bilawal Bhutto-Zardari’s concerns are valid as the possibility of rehabilitating the massive destruction of physical and social infrastructure in the face of a severe financial crunch facing the government in less than a year appears to be an understatement at the cost of the flood victims.
Since the budget was approved in the cabinet meeting why these concerns were not raised there where the PPP is amply represented? It is, however, interesting to note that some PML-N stalwarts are openly claiming that the budget was discussed with the Sindh Chief Minister as well.
Surely, the cabinet cannot be unaware of the fact that the budget 2023-24 is expansionary in nature with unrealistic revenue target that raises current expenditure by around 24 percent from the upward revised figure for the outgoing year and over 50 percent from the 2022-23 budgeted amount; and instead of working through the Benazir Income Support Programme (BISP), with scientifically identified beneficiaries, it continues the flawed practice of extending untargeted subsidies, making the forthcoming year’s budget as one of the worst examples of an election year budget that seeks to appease the stakeholders rather than the general public.
So far debate on the budget in parliament has been lacklustre, no doubt due to the lack of a viable opposition; however, independent economists and the International Monetary Fund have criticised the document.
In the words of the IMF Resident Representative in Islamabad, the budget has missed the opportunity to broaden the tax base in a more progressive way, and that the long list of new tax expenditures would further reduce the fairness of the tax system and undercut the resources needed for the vulnerable recipients of BISP.
We are glad that better sense prevailed as prime minister Shehbaz Sharif promptly took notice of the PPP’s complaint and directed the finance minister to engage with them to address their concerns. The minister too did not make it a matter of ego and allayed the concerns of one of the key coalition partners.
According to an announcement, the finance minister has committed a highly significant amount of money for repair and rehabilitation works in the flood-affected areas. With the support of the PPP assured the budget passage would now be a tame affair.
Copyright Business Recorder, 2023
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