End the budget ‘circus’

Pakistan has turned the budget into an annual suspense drama. Businesses wait. Markets speculate. Consultants guess. Television studios ask who will be taxed, spared, punished or rewarded. For weeks, the economy pauses to read signals from Islamabad.

This is not how a serious economy should run.

A budget should not be the annual moment when government reinvents economic policy. It should be a routine fiscal statement, showing how taxes finance a policy direction already announced, debated, legislated and institutionalized. Policy should come first. Budget should finance it. In Pakistan, the order has been reversed. The budget has become the policy.

This is why uncertainty never ends. Firms do not know next year’s tax treatment. Investors do not know whether incentives will survive. Exporters do not know whether refunds, energy prices or import rules will change. Salaried taxpayers wait to be squeezed again. Retailers expect another scheme. Real estate waits for another bargain. Everyone watches the budget because no one trusts the policy path.

Everyone discusses the fiscal deficit. Few discuss the uncertainty deficit.

When policy changes every June, investment becomes speculation. Business planning becomes budget forecasting. Instead of thinking about productivity, technology, expansion and exports, firms guess what the state will do next. This hidden tax on growth does not appear in the budget, but every serious enterprise pays it.

The government speaks of transformation, exports, equity, energy, environment, digital development, stability, investment, productivity and growth. These words are fine. But a vision is not policy unless translated into rules, institutions, priorities, budgets and discipline. If the budget contradicts the vision, the vision is decoration.

A government that wants exports cannot surprise exporters every year. A government that wants investment cannot keep changing tax rules. A government that wants documentation cannot harass the documented while bargaining with the undocumented. A government that wants productivity cannot keep feeding low-return projects. A government that wants energy reform cannot treat circular debt as accounting. A government that wants private sector growth cannot keep expanding the discretionary state.

This is where the EPBD Shadow Budget is useful. Its value lies less in its exact numbers and more in the questions it raises. It shifts debate from revenue extraction toward growth, YouTube expenditure control, SOEs, energy, debt, taxation, parliamentary scrutiny and private investment. It recognizes that Pakistan’s fiscal crisis is not simply a revenue problem. It is a state problem.

For too long, the formal taxpayer has been treated as the residual claimant for state failure. SOEs lose money; the taxpayer pays. Energy governance fails; the taxpayer pays. Pensions rise; the taxpayer pays. PSDP becomes a political shopping list; the taxpayer pays. Provinces avoid their own tax effort; the taxpayer pays. This is extraction without reform.

EPBD is right to call for tax rationalisation, expenditure reform, SOE restructuring, Treasury Single Account implementation, pension reform, subsidy rationalisation, PSDP cleansing and energy reform. These are not side issues. They are the reform agenda. Without them, every budget merely finances an unreformed state.

But EPBD also reveals the weakness of Pakistan’s reform culture. It lists the right reforms but does not explain the process of reform. Who will do it? Through what law? With what information? Against whose resistance? With what compensation for those who lose? These questions matter because reform is not arithmetic. It is political economy.

Tax reform requires evidence on revenue loss, behaviour and enforcement capacity. Compliance reform requires protection against FBR discretion. Expenditure control requires identifying waste and confronting beneficiaries. SOE reform creates losers in ministries, boards, unions and procurement networks. Pension reform affects powerful insiders. NFC reform requires a federal bargain. Energy reform threatens protected interests. PSDP cleansing disturbs politicians, contractors and departments. Banking reform affects finance.

This is the deeper political economy that EPBD and similar efforts must examine. Pakistan has remained trapped in repeated IMF programmes because stabilization has never become structural reform. Each crisis produces another package, another donor loan, another committee, another project office and another promise. The state expands even when every diagnosis says it must shrink.

To my mind the lynchpin reform is the civil service monopoly—something that most efforts such as EPDB miss. Pakistan’s colonial, secretary-led state controls policy, regulation, appointments, boards, authorities, project offices and implementation. It writes rules, manages files, sits on committees, approves projects, controls budgets, negotiates with donors, supervises regulators and then claims to reform the system it dominates. It is both player and referee.

This monopoly is driven and supported by the lenders who control our policy. Project offices, special units, authorities and reform cells become a parallel government, usually cleared, chaired, staffed or controlled by the same administrative structure. But the underlying power structure remains untouched.

No reform agenda can succeed without confronting this. The secretary-led state will not voluntarily close its own agencies, discipline SOEs, professionalize boards, devolve authority, empower markets, release cities, respect universities or surrender budgetary discretion. It will produce reports, invite consultants and create reform cells. But it will not end its monopoly.

The way out is to end the budget circus and identify the lynchpin reform. The budget should become boring. That would be progress.

A boring budget means businesses know the tax path. Investors know the policy direction. Provinces know their responsibilities. Citizens know what services are being financed. Ministries know old schemes must be evaluated before new ones are added. The private sector knows June will not overturn January.

Pakistan must stop using the budget to announce a new economy every year. Use it to show how taxes finance a stable, credible and already declared reform path. Until then, businesses will speculate, media will dramatize, consultants will guess, donors will lend, committees will meet, and the economy will wait for Islamabad’s annual surprise.

Copyright Business Recorder, 2026