The federal budget, that is a yearly affair, for FY 2012-13 was announced on June 01. It is called the “election-budget”, since it is the fifth and final one presented by the PPP-led coalition government before the polls. Like the previous ones, it has also failed to provide relief to the masses; especially low-income families, who have a difficult time to make ends meet. According to analysts and economists, Finance Minister Dr Abdul Hafeez Sheikh’s budget speech lacks the long-term vision for the country’s social and economic development. In short, no relief is provided to the common man struggling to survive.
It is a fact that when Dr Sheikh was appointed as Finance Minister, the country’s economy was already in bad shape. Also, it is not appropriate to hold him solely responsible for the challenges currently facing Pakistan. Yet, the question remains: Has the Minister succeeded, to some extent, to improve people’s lives?
Against this backdrop, the total outlay of the budget is Rs 2.96 trillion. It seems that it will have little or no effect on the majority of people. For instance, the 20 percent raise in salaries and pension of government employees will not provide relief due to inflation and the high cost of living. In addition, regular price hikes in electricity, gas and petroleum products have put the low-income groups in a difficult situation. So, a large segment of the country’s population with scarce financial resources is living from hand to mouth.
Can a finance manager make a budget for a family of four with a monthly salary of Rs 8,000, as recently announced by the government? Even worse is that the decision to enhance the minimum wage for a labourer is not being implemented in both the public and the private sectors. Many organisations continue to exploit their employees due to high levels of unemployment; they are paid even less than Rs 6,000 or Rs 7,000 per month. For the better, we need to understand and resolve our economic problems. We have to come out of the adhoc approach in dealing with matters of national importance. But our major problem is bad governance and financial mismanagement.
According to the budget, Rs 971 billion will be allocated for debt-servicing, Rs 545 on defence, Rs 873 on PSDP, etc. However, it is important to mention that debt-servicing and subsidies have already damaged the country’s economic growth. Besides this, the government promised to cut power subsidy to Rs 208 billion, which is 59 percent less than what it spent in FY 2011-12. Additionally, it granted only Rs 135 billion to Wapda as compared to last year’s budget, when it gave Rs 419 billion. Whereas, the national kitty would bear another Rs 50 billion of the KESC, which was granted Rs 45 billion in FY 2011-12. Nobody has an answer to the question why a privatised KESC would be allocated such a big amount? Government officials, however, have admitted that reduction in subsidies is unrealistic. The official figures of the last fiscal year confirm that the government had allocated Rs 166.5 billion for the power sector, but ended up giving subsidies worth Rs 512.3 billion. Also, Dr Sheikh in his recent speech accepted that the government had granted Rs 1.25 trillion in the power sector in the last four years. Despite this, the government has never held anybody responsible for huge losses to the national exchequer? Perhaps, this is why people have lost confidence in their rulers.
In such an alarming situation, how could a country with sluggish economic growth, burdened with both internal and external debts, with minimal Foreign Direct Investments (FDIs), along with the worst energy crisis, keep on pumping hundreds of billions of rupees to the corrupt and inefficient state institutions? The country does not have any price control mechanism, which is why people keep on facing mini-budgets throughout the year. The time when Dr Sheikh was announcing the budget, thousands of citizens were protesting in the streets against energy loadshedding. Under the given circumstances, people were expecting the government to announce specific measures to address the issue; however, like many other sectors it seems that this also missed the government’s priority list.
Today, electricity demand is around 17,500MW, while generation is between 11,000MW and 12,000MW. The gap between demand and supply will increase in the coming months. However, the main reason for electricity loadshedding is the non-payment of dues to the oil companies. The circular debt has crossed the figure of Rs400 billion, so the government should have allocated a substantial amount for it.
The only positive side of the budget was the allocation of Rs70 billion for the Benazir Income Support (BISP) programme, which may help reduce poverty and establish new utility stores to facilitate the low-income groups. The economic challenge is really very daunting; the measures initiated in the budget are inadequate!

n    The writers is broadcast journalist.
    Email: waheed.h35@gmail.com