The government keeps indicating that an agreement with the International Monetary Fund (IMF) is imminent and then it keeps missing those deadlines. The talks “remained inconclusive” although officials commented that they had made “good progress” - platitudes that have become empty due to excessive repetition. More worrying is the lack of communication from the top regarding the points of contention and the snags in negotiation. Officials remain evasive with details, while we are only told that the IMF mission had taken an “unusually aggressive posture” towards their demands. With a new financial team in place – and already in flux in the case of Shabbar Zaidi, the new chairman of the Federal Board of Revenue (FBR) - the uncertainty in the economy is rife.

It is in the middle of this that the government has called a meeting of the Annual Plan Coordination Committee (APCC) on May 20 to approve a developmental budget for the next fiscal year. While much is still up in the air the Planning Commission has indicated that it has been working on a federal Public Sector Development Programme (PSDP) of about Rs675 billion under an indicative budget ceiling conveyed by the Ministry of Finance - about 10 per cent lower than current fiscal year.

The federal PSDP for current year (2018-19) was originally approved at about Rs1.03tr which was later reduced to about Rs750bn. Taken holistically, the sharp decline in the development budget under the new government is evident. These are still tentative figures, the outcome of the IMF negotiations, or even a retroactive reduction, such as the one that was done in this fiscal year, might slash the budget even further. With military spending, debt servicing and power generation budgets off the table, it is only development that will face the butcher’s block.

Infrastructure, health, education, water works – all essential fields are expected to slow down. New initiatives will be few and far between, and many existing projects will have to slow down as a result.

This sharp depreciation in government development would have been acceptable if the government had also increased revenue generation – since that would have justified the austerity mantra. Yet tax revenue collection has slipped considerably and the three major sectors of economy - agriculture, industry and services sectors – underperformed and could not meet their output targets set for the year. Coupled with the fact that the total public debt as a percent of the GDP has ballooned uncontrollably under the new government, the economic picture looks extremely grim.

And the IMF axe is yet to fall.