In the modern era, governments all over the world are charged with the responsibility to propel economic development, playing a facilitating role in the creation of conducive atmosphere for different sectors of the economy enabling them to contribute to the overall development effort, raising revenues to meet ever growing needs for socio-economic development and above all promoting wellbeing of the masses through measures that aim at providing relief to them and alleviation of poverty. The diversity of stakeholders and conflicting interests makes the task of governments quite difficult in performing a balancing act. That is why economic management of an economy, especially a developing country like Pakistan, is an extremely onerous undertaking. Budget is considered as the most important tool of economic management and rightly invokes lot of interest among different sections of the society as it one way or the other affects the lives of the people and their economic situation.

For the PTI government which has practically presented its first ever budget, honestly speaking, it was really very difficult to perform a balancing act in view of the precarious economic situation of the country. In the backdrop of the country missing all the macroeconomic targets, GDP growth standing at 3.29%, debt liabilities touching Rs.31 billion requiring as astronomical amount of Rs.3000 billion for debt servicing and alarming current account and budgetary deficit, the things presented a very bleak picture. Nobody in his right mind and savvy of the economic challenges confronting the country can take an issue with the narrative of the government that the problems left by the previous government were of debilitating magnitude and needed realistic and radical approach to not only fix the maladies but also to rejuvenate the economy.

Under the circumstances the government had no choice but to seek assistance from the friendly countries from which it collected $9.2 billion and also to approach the IMF for a bailout package of $ 6 billion. Dr. Abdul Hafeez Sheikh while launching the Economic Survey was right to observe that the government had to borrow to pay back the already obtained and piled up loans. In regards to the deal with IMF he was on money to say that this initiative demonstrated the seriousness of the incumbent regime in ensuring economic discipline.

The steps taken by the government since its inception to rectify the economic maladies as also reflected in the current budget actually indicate its political will to ignore the political expediencies and adopt a realistic approach to revive the economy even though in the short term it might hurt certain sections of the society. The government seems determined to pay whatever political cost it has to pay to make sure that the future economic landscape of the country presents a vibrant look and the country treads on the path of sustained economic growth.

There is no escape from the fact that to come out of the vicious cycle of burgeoning budget deficit which is mother of all economic woes the country needs broadening of the tax base and curtailing expenditure. Generation of revenue through new taxes is always a very difficult option for political governments and many tend to succumb to the political vibes for their own political gains notwithstanding the fact that such moves push the country towards inevitable economic melt-down. Therefore, it is encouraging to note that the PTI government has made a conscious and determined move to reverse the process. It has set a revenue collection of Rs.5.555 trillion as against the revised estimate of Rs.4.150 trillion which it aims to achieve through additional taxes worth Rs.600 billion including levies on salaried persons and consumable goods, withdrawal of exemptions and increased duties on imports. The government has also made a decision to abolish zero-rating regime for five export-oriented sectors including textiles, leather, carpet, surgical and sports which will fetch additional revenue of Rs.85 to Rs.90 billion. The FBR is eyeing Rs2.082 trillion in the shape of direct taxation and Rs3.473 trillion through indirect taxes in the coming fiscal year. The implementation of asset Declaration scheme and bringing benami and other unregistered assets in the formal economy is another policy initiative which will help in enhancing the tax base. The foregoing measures might seem harsh and also have inflationary effect and be unwelcome to those who will have to pay more or whose exemptions have been withdrawn but the fact is that they were inevitable and have been taken as a bitter pill to cure the ailing economy.

The contention of the government that it would benefit the economy and the people in the long run when the steps taken by it will start producing positive results is beyond reproach. Is it not a shame that in a country 0f 200 million people only two million pay incometax. With such a small revenue base how the development and prosperity of the country can be conceived? It surely needs creation of indigenous sources to propel the effort. The country cannot survive on borrowed money. There is an imperative need for creating a tax culture in the country that transcends political considerations. That is exactly the government seems to be doing.

In regards to curtailing government expenditure civil budget has been slashed by five per cent while the military budget will remain the same as announced by the COAS. That really indicates the gravity of the situation. However in spite of these difficulties the government has tried to ensure that the momentum of the development efforts is not disrupted. The total allocation for the national programme stands at Rs.1863 billion including federal PSDP of Rs. 951 billion which has been enhanced from Rs.500 billion.

It has also been made sure that poorer sections of the society are given relief to minimize their difficulties. Provision of Rs.200 billion for providing relief to electricity consumers who consumer up to 300 units, Ehsas progremme for poverty alleviation, enhancement of quarterly stipend under BISP from Rs.5000 to Rs.5500, Sehat Sahulat programme, raising of minimum wage from Rs.15000 to Rs.17500, raise given in salary to the government servants and pensioners are some of the measures to be mentioned that the government has taken to provide relief to the vulnerable sections of the society.

It is pertinent to mention that in spite of the difficult economic situation the total outlay of Rs.7022 billion the for 2019-20 represents 30% % increase as compared to the volume of the budget last. Under the current economic scenario the budget for 2019-20 seems the best possible effort that any government faced with enormous economic crisis could have managed to unfurl. Only the cynics can take an issue with it.

The writer is a freelance

The government seems determined to pay whatever political cost it has to pay to make sure that the future economic landscape of the country presents a vibrant look and the country treads on the path of sustained economic growth.