Ask any middle income person what he or she thinks about the annual budget and you will be told it is a hateful practice especially designed to ill-treat, oppress, torment and put to death a person on grounds of belonging to the middle-class, which is the only class whose income is on record and taxable.
The budget does not hit any other class below the belt. Those with tons of money in undeclared wealth, the affluent class, are not affected. The poor only want to know if the price of roti will increase. The labour force wants to know if increase in the price of CNG, petrol or diesel will lead to increase in bus fare. In short, an item or two may bother others but the whole budget does not persecute them.
The victims of the annual budget belong to the middle-class, which is made of educated people with professional or business careers, such as managers, accountants, technocrats. Karachi has Pakistan's largest middle-class population, which is the reason why, as the days draw near to the announcement of the annual budget, the city is in a bad mood. It is in a bad mood these days, searching for any excuse to get angry and protest, often about the most trivial issues. We had a lot of that last week as you know, but the least said about them the better.
The problem is the fixed income of the middle-class which does not increase with inflation, so what is earned keeps decreasing in purchasing power. I once had a sticker which described this plight humorously: "My take-home pay won't take me home". A favourite description of the four weeks of the month and the fate of money in that period is best expressed in Urdu. The first week is called hafta-i-maikashi, a happy week. The second is hafta-i-kashmakashi, a week in which you struggle to make ends meet. The third week is hafta-i-faqakashi, a week in which you starve. The fourth week is hafta-e-khudkashi, a week in which you want to say goodbye cruel world.
There are direct taxes and indirect taxes. So the argument goes, everybody actually pays taxes. Quite true, but only the middle-class gets the direct hit, and also several indirect punches. This yearly battering means the middle-class is becoming poorer and a lot of people's income really should define them as working class. The growing poverty of the middle-class is of course recognised because we have coined an euphemistic term "lower middle-class".
Yet I was amazed to read the rosy picture of the middle-class presented by the local chief of a multinational company. "We have more people in the middle-class as a percentage of population than India," he stated. He informed further that 25 million people joined the middle-class in the last five years of whom seven million are in the upper middle-class. Population increase does not tell you anything. For example, an average middle-class family has three children, which means an increase of three persons in the middle-class, but it also means one income is supporting five persons including father, mother and the three kids.
We seem to have simply borrowed western social classification, but actually, upper, middle or working class do not really define the economic culture of Pakistan. Here we have beradaris, tribes, unpaid slave labour such as the bonded labour of brick kilns, the haris owned by waderas of Sindh and kammis by Punjabi landowners. The sectarian division should also be considered since there is cronyism among certain smaller sects which are obligated to promote each other's prosperity. Wealth passes through these divisions. It is only in a small urban pocket that modern system of income distribution and revenue collection really works. In other words, the annual budget is an unrealistic exercise.
Pakistan's economic classification should be described as the Haves and the Have-nots. Both groups exists in the beradaris, the tribes and the agricultural social system. Wealth distribution and revenue collection is determined by these factors and not by the annual budget plan.
Financial experts and economic pundits may read this article with a cynical smile because they do not empathise with the middle-class especially the so-called lower middle-class. They simply do not comprehend human suffering. Neither does the Finance Ministry which believes in taking from the middle-class but ignores the duty to give something back which will serve the welfare of these beleaguered citizens. Proof is in the annual budget in which the two characteristics that define middle-class are treated virtually as unimportant: education and jobs. A laughable pittance is allocated to education, as for jobs, if it is true that 25 million persons have joined the middle-class in the last five years, the budgets of those years did not plan for creation of 25 million jobs.
Why is this so, considering the middle-class is the only dependable source of revenue collection? Because the middle-class has a voice, look at Karachi. Do you think feudal culture will want such people questioning them? Never. That is why tribal chiefs and agricultural land owners do not want their dependent people to be educated or learn professional skills which will empower the masses and upset the feudalised apple cart.