It has not been a good financial year. The coronavirus epidemic has taken a giant toll on the economy, not only with the lockdown and the drop in purchasing power of consumers but also with regards to the funds that the government has had to allocate to combat the pandemic. Perhaps even more disastrously, the swarm of locusts attacking crops in the country pose a greater threat to the economy than the lockdown. Moreover, Pakistan’s debt is the highest it has been in years. This leaves the government with little fiscal space to make any substantial breakthroughs for the new financial year. The goal seems to be to allow our cash-strapped economy to survive, rather than to achieve quantum leaps.

The Federal budget for 2020 thus should be assessed with these considerations in mind. For the despondent reality the country is experiencing currently, the government seems to have produced a satisfactory enough budget. To provide relief to people, a large number of whom have been long-suffering due to increasing inflation, there is no new tax in the 2020-21 budget. There will be no tax on coronavirus and cancer diagnosis kits and the import taxes on children’s food supplements and diet food have been abolished too. The downfall with that is the government has decided not to increase salaries and pensions of government servants – a development which will have an inimical impact on all wages.

A budget is a reflection of the times – and the times are very grim indeed. A lot of the blame can be attributed to the pandemic, which has exacted an economic toll across the world – yet the government is also not completely blameless. It has not handled the fuel price fall well – the drop in fuel prices were not accompanied by a fall in inflation. It is also responsible for inculcating debt in the trillions without a conclusive plan, leaving it too limited to draft a more comprehensive budget.