Even after the announcement of the first budget of the coalition government it is still not clear as to what the major priorities of the government are and what they are going to be. It is true that the economic situation is bad and the government had to make a budget in very constrained circumstances. International and domestic shocks have increased inflationary pressures, reduced foreign inflows and increased pressure on foreign currency reserves, the interest rates as well as the exchange rate. Domestic slowdown is increasing concerns about lower growth, unemployment as well as increases in poverty. The government clearly had to cut expenditures at a time when the economy is slowing down and poverty becoming an even larger threat. At the same time the government also had to live up to its electoral promises. This was a difficult position and the budget, clearly, tried to do a little of everything. The question is: while trying to do too much and a bit of everything did the government end up having a budget that does not do anything well and one that does not even tell us what is the grand plan of the government? Democratic government had come in with the promise of providing relief to the people. The people were hurting from food and fuel inflation, they were hurting from lack of electricity, problems related to access to potable water, sanitation, lack of facilities for health and education and lack of opportunities for gainful employment. The budget has made some promises on these fronts, but it does not seem that providing relief has been given the high priority that was expected from the democratic government. The commitment to health and education, in the federal budget at least, is only marginally above what it was last year. It is true that expenditure on primary and secondary education is mainly a provincial subject, but this has never, in the past, stopped the federal government from either running or using its funds to supplement the efforts of the provinces. If education and/or health were a priority, the federal government could have used such means again. But it has chosen not to. This does say a lot about what the government is thinking about, or more properly, what it is not thinking about. Has the economic crisis made the government too focused on the short as opposed to the medium/long run? Is the government trying to manage expectations and the crisis in the short run while forgetting that the real war in Pakistan is against lack of human development; something that PPP and PML-N have clearly been worried about? The budget speech did talk of two initiatives that might temper what has been said above. First, the finance minister said that the government is committed about setting up a commission on human development issues that will look into issues related to unemployment, vocational training and related areas (quality of education would have to be one of the areas). The commission has also been promised adequate resources to be able to do its job. The problem with the announcement is that no details about the commission, its remit or powers were given to the people, and there have been so many commissions set-up by the previous governments too, including commissions on government reforms, human development, status of women, and so on, and none of these commissions have been able to deliver a lot and hence a healthy scepticism about this promised commission does not seem unwarranted. What if this is another lame commission that does nothing except work for the aggrandisement of its chairperson and the top people in the government? Did the commission on government reform do anything else? Or has the National Commission on Human Development achieved anything else? The other major initiative announced was the initiation of Benazir cards. Although the details of the scheme have not been clearly laid out again, and we will come back to issues involved there, but it does sound as if the government is starting to think about creating a cash transfer based system of social protection. The government has promised Rs 30 billion for the plan, with the promise of topping it up to Rs 50 billion if needed, and it has also promised that this money is going to be used for the poorest of the poor in Pakistan. This is, potentially, a big and positive step and in the right direction, if the government is serious about targeting relief for the poor in our society. But again, the problem is details. We have two general-purpose systems that deliver relief to the poor: Zakat and Bait ul Maal. Forgetting Zakat as it is being run by the Religious Affairs Ministry, Bait ul Maal is one institution that has been used for delivering targeted subsidies. And in the last few years the previous government had even tried, though very half heartedly, to expand and improve the delivery mechanism of Bait ul Maal, why has the government not chosen Bait ul Maal as the vehicle for delivering the new programme? Why has the government chosen to set-up a new institutional and organisational set-up? If the Bait ul Maal delivery mechanism was not trustworthy or good enough, how can the government choose to ignore it (and the finance minister did say that Bait ul Maal programme will continue as well), and what makes the government think that it can, very quickly, set-up a better delivery system? More importantly, targeted programmes, such as the Benazir card, require the ability to identify the poor in a way that allows people to have the confidence that the right people have indeed been identified. This requires setting up proper means testing mechanisms as well as third party or independent evaluations and audits to assure the quality of selection mechanism. It also requires the ability to deliver relief of meaningful size and to a large enough group in a cost effective and efficient manner as well. Will the government be able to set-up such a system? The government has announced that it will deliver Rs 1,000 a month to each poor family, and it will be a meaningful amount for the very poor, but how is the government going to identify the poor? Just saying, as the finance minister did, that Nadra's database will be used tells us nothing. Nadra has an identity database, it cannot tell you whether the people in the database are rich or poor, deserving of help or not. For that an independent system is needed. But if the government is going to develop such a system, since Bait ul Maal needs such a system too, why did the government not try to develop the system within or in collaboration with the Bait ul Maal? Another fear of course is that we will have a lot of political interference in the selection of candidates for relief and we will, in the end, have another compromised institution/organisation on our hands. So, where the relief measures are not so clear (though the increase in salaries, pensions and minimum wage is to be welcomed) and were not very well fleshed out in the budget, the measures that will make the life of ordinary people more difficult were. The government will be passing on the oil price increases to the people, some of the larger subsidies, on wheat, electricity etc., will be cut, sales tax, a very regressive and indirect tax, has gone up by one more percent. The details of a lot of the tax proposals are going to be in the finance bill, especially related to the removal of exemptions and so on, so it is not clear what the impact of these is going to be on the people, but clearly it is not going to be positive. At the same time, though a lot was said on agriculture and industry, the supposed "engines of growth" for Pakistan, apart from tinkering in a few duties and a few subsidies, the budget speech did not really make it clear as to what the government is really thinking (if at all) about what the growth strategy of the country is going to be. Tinkering is not going to get us out of the mess we are in. We need a strategy for revolutionising agriculture, dairy and livestock areas, and we need major interventions in the textile sector to get our exports going. But these too were not a part of the budget speech. On the whole the feeling from the speech was that the government was trying to do too many things and keep too many stakeholders on board without a good idea of what it really wanted to do and without a larger vision of the future. So the budget has a lot of tinkering but few bold steps. And the initiatives that have the potential of being bold steps have not been thought through or explained enough. The government had multiple objectives and real constraints, but muddled and unclear thinking is not the right response to deal with these, a clearer vision and prioritisation would have been better. That might have meant that not all people would have been happy, but it would have allowed at least some to be happy: this budget is unlikely to satisfy any significant group of people (except the stock brokers of course who have yet again been successful at "convincing" the government into not putting taxes on gains in capital markets). E-mail: faisal@nation.com.pk