The opposition leader in the National Assembly, Khursheed Shah, initiating the debate on the budget 2015-16, rejected it out rightly as ‘anti-poor, pro-rich and based on artificial economic perceptions with missing targets’. Moreover, he alleged that the government had destroyed the agriculture sector and failed to control load-shedding. The opprobrium being hurled by the opposition is quite understandable because in our country the opposition thinks that its only role is to criticize and oppose the policies of the government, without evaluating them in their proper context and the ground realities dictating those steps. This is done notwithstanding their own dismal performance when they were in power. Criticizing the policies in a constructive manner is the right of the opposition parties, rather an obligation, in a democratic set-up. But criticism for the sake of criticism is a negation of the role the opposition is supposed to play.

The energy crisis gripping the country was severe during the PPP regime and it could not do anything substantial to prevent power-outages, which the opposition leader is now blaming the government for. All the budgets presented by PPP also missed their targets, where the fiscal deficit stood at 8.8 % of the GDP and the country was on the verge of default on loans. Inflation stood at double figure and the economy was decidedly in shambles. As compared to that the fiscal deficit which is considered as the fountain of all economic woes has been brought down to 5%. Inflation has been confined to single digit and the country is saved from default.

The growth targets fixed by the government may have been missed during the last fiscal year, but the fact remains the economy as a whole has performed well as compared to previous year and also shown discernible signs of revival during the last two years which has been corroborated by independent sources, like the world lending institutions and international rating agencies. The targets fixed by the government are actually perceived projections based on a number of contributory factors remaining constant. Any unforeseen changes in them on the domestic and international level can have a profound impact on the fixed targets. So while evaluating the performance of any economy and its different segments it is imperative to give due consideration to all those factors.

It is pertinent to point out that although the targets were missed, no sector of the economy showed negative growth and the overall growth was led by the agriculture sector, contrary to the claims of the opposition. An incisive look at the budget for the year 2015-16 reveals that the major focus is on broadening the tax base, consolidating the economic gains during the last two years, nudging the economy towards a process of sustained economic growth with agriculture playing a leading role and off-setting the impact of taxes through relief measures. The government has taken substantive steps to encourage investments in the agriculture sector, where the allocation for the agricultural credit has been enhanced to Rs.600 billion as compared to Rs.500 billion last year. The credit guarantee scheme announced last year would continue. In addition to this the farmers will be extended interest-free loans for setting up new solar tube wells and the facility will be provided for sinking of 30,000 tube wells over the next three years. Similarly the government has proposed three year tax holiday for new industrial undertakings engaged in setting up and operating cold chain facilities and setting up and operating warehousing facilities for storage of agriculture produce, which are set up before 30th June, 2016. These are appreciable steps to boost the agriculture sector.

In regards to nudging industrial growth and tiding over the energy crisis tax holidays have been announced for industrial undertakings engaged in the manufacturing of equipment, plant and items required to produce solar and wind energy. In order to attract private sector investment in electricity transmission line projects, it has been proposed to exempt profits and gains derived from the same for a period of 10 years, provided that the projects are set up by 30th June, 2018. Sales tax exemptions on bricks and crush for three years will surely spur the labor-intensive housing sector.

The volume of the federal PSDP has also been enhanced by Rs.158 as compared to last year. Five year tax holiday has been announced for investors setting up industries in Khyber Pakhtunkhawa, where the government has also reduced the interest rate on Youth Business Loan from 8% to 6%. The defence allocation has also been substantially enhanced, and rightly so, to ward off threats to the security of the country and fighting terrorism which is absolutely necessary to spur economic activity within the country and attracting foreign investments.

In meeting the enhanced target of tax revenue, a conscious and deliberate effort has been made to rely more on direct taxes and avoiding indirect taxation which has a spill-over effect on different segments of the society, especially the poor masses. No doubt some indirect taxes have also been introduced which would ultimately be borne by the entire population but the fact is that there was no escape from them. Imposition of new taxes, no matter how justified and essential they are, is always an unwelcome move on the part of the governments all over the world, notwithstanding the fact that they are needed for financing future development projects and enhanced and qualitative social services. However the government has taken due care of the poorer sections of the society by enhancing allocation under BISP to Rs.102 billion which would benefit 5 million families; increase in allocation for Baitul Mal from Rs.2 billion to Rs.4 billion; reduction in the rate of withholding tax on token tax and transfers of cars; enhancement of minimum wage to Rs.13000 from Rs12000 and relief to the salaried classes through enhancement of 7.5 % in salaries and pensions , increase in the medical allowance by 25% both for serving and retired government employees and reduction in the rate of taxes on their taxable incomes as well as people having an income of upto five hundred thousand.

In view of the foregoing facts it is not difficult to infer that the budget has taken due care of the developmental needs of the country, broadening the tax base on which there is a national consensus and providing affordable relief to the masses. Honestly speaking it was a commendable effort on the part of the resource-constrained government. The future certainly looks bright in view of $ 46 billion investments under CPEC and the launch of 10640 MW power projects, to be completed by 2017-18.