Federal Finance Minister Hafeez Sheikh presented a Rs 2.504 trillion federal budget, including a development component of Rs 730 billion, to the National Assembly (amid Opposition slogans) on Friday, the day after presenting the Economic Survey 2010-11, the document on which the budget exercise is based. The survey showed that the government, which had targeted the deficit at 4 percent of the GDP, had let it grow to 5.9 percent. The target is again 4 percent, which at Rs 850 billion is quite substantial. The Finance Ministers speech showed that there had been no attempt at reducing government expenditures, nor had there been any meaningful attempt at cutting frivolous spending by cabinet members. It was paradoxical that the cabinet had to be expanded with new allies before the budget was presented. There has been much talk, but no action has been even indicated, which implies a lack of the seriousness demanded by the situation. Spending on the war on terror will continue, even, as Dr Sheikh mentioned, 35,000 people have been killed in it, including 5000 members of the armed forces. The armed forces budget has not been cut, fortunately enough at this time of national crisis, but that is perhaps all that can be said for the budget. The giving of a raise to government servants may well place a burden on the government, but it was necessary in these inflationary times, and does not really cover the erosion of incomes caused by inflation. However, the raise will eat into the money that the provinces got under the 7th NFC Award. At the same time, not enough attention has been paid to loadshedding. Though substantial sums have been allocated to water and power, or rather to hydel, there has been no sense of urgency shown. The operations of PEPCO and the distribution companies have not been closely examined to eliminate this cancer which is not only making the ordinary consumer miserable but also damaging industry. While the increase in limit for taxable income provides some inflationary relief but not anything else, the rush to increase the tax net by the initiative already started, of bringing 2.3 million individuals into the tax net, to add to the 1.5 million already in it, must not be allowed to degenerate into political victimisation or an opportunity for corruption. The new taxation measures do not bring to an end the number of mini-budgets that the ordinary citizen will face. However, the ending of the special excise duty and the abolition of the regulatory customs duty should translate into a reduction in prices, and can be claimed as an anti-inflation measure, only if it does. The government has borrowed extensively from the IMF in making the budget, most notably in its ending of GST exemptions. The budget shows every sign of being designed to satisfy the IMF, which might explain why it did not contain any measures to encourage business and industry.