A total budget outlay of Rs7022 billion with expected revenue of Rs6717 billion has been announced with over 80 percent of the revenue coming from taxes. With the Federal Bureau of Revenue (FBR) increasing next year’s tax collection target up to Rs5.5 billion, it will be interesting to see how the state body meets this target even though it has continuously missed other targets over the years. The government is looking to take steps on making tax payment even simpler and is hoping that the amnesty scheme announced recently will bring in more taxes through asset declaration, however, previous governments have learnt that the expected windfall from amnesty schemes has never really materialised. PTI is very likely to be disappointed when the revenue targets are missed and revenue collection does not go as planned.

As far as expenditures are concerned, there is nothing that is very surprising in this year’s budget. The ruling party has brought down developmental expenditures to Rs949.48 billion from last year’s budgeted amount of Rs1152.11 billion. It remains to be seen how this reduced government spending will affect the economy’s growth. Reducing public expenditure can lead to a stagnating economy, however given that the decrease is not a big proportion of developmental funds, the damage might not be too extreme.

Apart from revenue collection, the government is also looking to improve the current account deficit through increasing exports and decreasing imports. Decreased duties on raw materials such as wood for furniture production and export are sensible decisions made by the government to encourage diversified growth. Given that the country’s agricultural sector grew by less than 1 percent in the last year, the manufacturing sector by less than 2 percent and the services sector by 4.7 percent (all of them missing the targeted growth rate), the country needs to drastically improve its production if it has to even think about exporting.

Finally, one important issue that the general public will be interested in is inflation. The government has increased duties on consumer goods such as food oil and sugar, and add this to the rising oil prices (both national and international) and the increased tariffs in the power sector, the average household’s basket calculation will go up significantly in the coming year. The government’s solution for this is focusing on poverty alleviation schemes through the Ehsaas programme a higher minimum wage now set at Rs17500 and ensuring that consumers of power that use less than a specific amount will be spared from the increased costs. Will all of this be enough? Doubtful.