The Federal budget, I have consistently maintained is now a non-event in Pakistan as the numbers projected and the policies announced in this exercise are repeatedly chopped and changed during the course of the year. This budget promises to be no different; in fact this time the government itself has conceded that the measures and levies announced will be re-visited for alterations as early as October 2010 - so much for the stability and continuity a budget is supposed to provide for a period of at least one year, if not longer The budget, in general, turns out to be a big disappointment as not only does it lack direction and is full of contradictions, it also happens to add to the prevailing uncertainty in the economy, is damaging to trade and industry and downright confusing. Contradictory, as in the same breath on one hand we heard a lot of sermonizing during the budget speech on nation building, self prudence, etc. while on the other (instead of putting his money where the mouth was) the announcements gave an entirely different message. Allocation to key nation building sectors like education, science and technology, and sports stood reduced, whereas, Prime Minister and Presidential budgets were increased. Confusing, because owing to open issues on value added tax (VAT), general sales tax (GST), indirect levies, utility pricing and implementation mechanisms, it still remains anybodys guess as to what will transpire next October. For example, after significant losses to the national exchequer and a lot of persuasion by honest players in the private sector, it was determined that absence of zero-rating on exports in effect tends to promote corruption and is counterproductive both for governmental revenues and facilitation of national exports per se. By failing to provide clarity on this aspect in the post - October period (once VAT is implemented) the silence adds to the magnitude of the prevalent uncertain economic environment, which as we all know is not good for any economy. Without going into the numbers, which is better left to accountants, lets simply try and analyze where exactly the budgetary announcements are likely to take us. With a mounting debt (currently at near 55-56 percent of GDP) one hoped to see a strategy in place on how the economic managers plan to take the country out of the IMF grasp and move towards self-reliance. Sadly no such initiative was even mentioned. The statistics for the first quarter 2010 on emerging economies have just been released by the World Bank, according to which Emerging Economies where Quantitative Large Scale Manufacturing (LSM) grew significantly include India @ nearly 17 percent, China @ 15.50 percent and sadly Pakistan was not even mentioned. Our own survey indicates that LSM in Pakistan grew by 5.30 percent, but fails to explain whether this growth (if true) came from quantitative or value denominations. Given our inflation rate and a devaluing Pak currency, if it was in value terms, then in reality LSM actually went down. In fact, such a downturn is quite likely when we look at the power and energy shortages during the last six months. However, the main point being that this budget instead of addressing the concern on dampened LSM is more likely to exacerbate it. In the period ahead, the new levies and resultant inflationary pressures will surely increase the cost of manufacturing in Pakistan and thereby adversely impacting the LSM. Increasing manufacturing and productivity are very important for self-reliance because only if an economy itself grows, generates employment and produces surpluses in exports and domestic consumption, it can go on to become self-reliant - Other than China and India examples like Japan, Malaysia and South Korea guide us on how productivity and a surge in LSM happen to be the main ingredients of their economic success. Now it is one thing when the public moans about the IMF imposed fiscal discipline, but it was quite amazing to see the finance minister complain about the unfair treatment meted out to Pakistan by the IMF as compared to Greece. My question is that do we fault the IMF for this or our own negotiating team? In case of Greece we saw some real tough negotiations by them where they cleverly played the card of Greece being too important to sink vis-a-vis widespread implications on the European Union, thereby allowing them to draw lines beyond which the IMF authority was denied access. Our case was totally different as at no point did we muster the courage or show the self belief in Pakistan being too critical to be allowed to fail and therefore as a result our negotiators came across more like representatives of the Raj helping IMF impose its agenda rather than leaders watching over Pakistani public interest. So why complain and especially when even the present policies show no bold initiatives to avoid going repeatedly to the IMF doorsteps? Finally, on how the government spokesmen are terming this budget to be a 'balanced one, a term frankly I have never been able to fathom. If it refers to numerical values then every budget needs to balance on paper between the projected expenditures and expected revenues. However, if it is the effectiveness that is implied by the term 'balance, then are we saying that we are happy with the current balance of the economy? In my book a budgets quality should be measured by determining whether or not the policies announced will make the next years budget any easier. Meaning, that are we headed in the right direction or not? For the moment, one is not sure that apart from the blame game and the drawing room style rhetoric adopted in the delivery speech, what precise strategy or vision has the finance ministry adopted to turn around the Pak economy? Are we to take the route of export led growth or are we counting on successfully attracting significant direct foreign investment to boost large scale manufacturing in the country or is it that we have a sound plan to shore up employment by maximizing employment generation through growth in our small and medium sized enterprise sector or do we intend to direct borrowings towards stimulating growth which over time can become our engine to generate funds for repayments or if none of these then what exactly is our game plan? Also, it appears that the economic manager for now have no clue on how the potential of the private sector can be harnessed to strengthen public sector management capabilities, which in turn can help rein in the recurring losses of the large state run enterprises. While one can understand colleague sympathy in the 50 percent raise announced for the bureaucracy, one fails to see how will this generosity resolve the dearth of quality human resource amongst government servants, a phenomenon we are witnessing today? Sadly, this budget failed to address any of these concerns or even provide the much needed ray of hope to the people that there may be happy days ahead and perhaps the only silver lining being that there are only three months between now and October, when the government plans to have another go