ISLAMABAD - As the government’s financial wizard, Ishaq Dar, is set to unveil the national budget for the fiscal year 2015-16, it is increasingly becoming evident that it will not be a ‘commoners budget’.

“The common people expect good raise in salaries and steps to control price hike...... unfortunately, this may not happen in the coming budget”, a financial expert affiliated with the Finance Ministry told The Nation.

“They are planning 10 per cent increase in salaries and pensions which will not be compatible with the inflation and price hike. Even if they go for 15 per cent raise under political pressure (for incumbent and retired government servants), it will hardly make any difference for the people”, the expert opined.

Another official at the finance ministry said that the government will have to pay an extra of Rs20 billion in case of 10 per cent raise in salaries and pensions. “This will go up to Rs30 billion extra if the raise is enhanced to 15 per cent”, he pointed out.

The business community too is keeping fingers crossed as they fear an International Monetary Fund-(IMF) dominated policy could make life tougher for them. They have taken a cue about the outline of the forthcoming budget from the statements of Finance Minister Ishaq Dar after meeting the IMF officials this month at the completion of the seventh review by the Fund under Extended Fund Facility.

At a news conference after talks with the IMF team, Dar had assured the lender that over the next financial year, the government will strike down tax exemptions worth Rs100 billion, increase power tariffs to settle the circular debt, cut subsidies, and make greater efforts to generate revenue.

IMF mission chief in Pakistan Harald Finger had said, “Key priorities for the second half of the IMF programme include improving the energy sector, widening the tax net to create space for infrastructure investment and social assistance, improving the business climate and further strengthening external reserve buffers”. Last Tuesday, the federal cabinet had approved the budget strategy paper and proposed targets for the next financial year. The meeting presided over by Prime Minister Nawaz Sharif had also discussed the state of economy.

An official statement said, “The cabinet approved guidelines for further strengthening national economy, streamlining tax system to broaden its base and ensuring provision of maximum relief to the common man”.

“Prime Minister Nawaz Sharif directed that the next budget should focus on providing maximum relief to the people”, it added. On Monday, the National Economic Council (NEC), at its meeting chaired by Premier Sharif, approved development outlay of Rs1.514 trillion and fixed a Gross Domestic Product (GDP) growth rate of 5.5 per cent for the next financial year.

The development outlay includes Rs700 billion as federal Public Sector Development Programme (PSDP) and Rs814 billion as Provincial Annual Development Programme (PADP).

An official statement after the meeting said the growth target for the agriculture sector has been set at 3.9 per cent while for manufacturing sector it is 6.1 per cent. Export target for the new financial year has been set as $ 25.5 billion.

In his comments, Board of Investment (BOI) chairman, Dr Miftah Ismail said, “It is very difficult to made people-friendly budget because in the last five years our economy goes downwards. Poverty increased and growth rate has decreased”.

He added, “Now the economic conditions are improving in the country under the leadership of Nawaz Sharif. After the investment of China, our growth rate will grow and new opportunities of employment will be created”. “The present government is committed to change Pakistan as an economic power in the region. The budget would be pro-people and friendly”, Dr Ismail, who is also a special assistant to the PM, said.

Economic expert Dr Saboor Ghayur said, “The government should launch short term projects to provide prompt relief to the public. Our tax system is quite good but we need to enhance tax net which will generate more revenue”.

“Long term projects will take more time as compared to short term projects. The government should focus on industrial sector because it will create more employment opportunities”, he added.

Pakistan Economy Watch head Dr Murtaza Mughal remarked, “Budget should be people-friendly and the government must address the problems of poor people. The minimum wage should be enhanced from Rs12,000 to Rs20,000, so that the people can meet their basic necessities of daily life. It is a difficult decision but it is possible through reducing extra expenditures of the government”.  Dr Mughal suggested, “The government should introduce reforms in tax collection and announce incentives for the traders who pay their taxes”.

Finance Minister Ishaq Dar insists that the federal budget will bring encouraging incentives for the betterment of the overall economy and for job generation. He believes the people of Pakistan will acknowledge the “development-oriented approach of the government”.

Media reports claim Prime Minister Sharif is very concerned about two things - resolving the energy crisis before the 2018 elections and meeting his commitments to Beijing for the China-Pakistan Economic Corridor (CPEC). All else, for the moment, appears to have been put on the back burner.

For energy, the seriousness of Prime Minister Sharif’s intent appears to be getting stronger as 2018 approaches.

Analysts think the provincial budgets may also have little joy for the common man as the federating units were likely to follow the Centre when presenting their budgets.

“Sindh and Khyber Pakhtunkhwa can go for some popular decisions prompting the other provinces to give better raise in salaries and pensions but no big announcements should be expected”, an analyst observed.