Mega numbers, fancy accounting and tall claims But really, I have personally come to a stage where I no longer take the budget speech very seriously, because if one analyzes the track record of the last six to eight years one realizes that during the course of any given year the actual spreads never even remotely match the laid out proposals Quite honestly, one cannot entirely blame the government either, as due to mainly three things it is becoming increasingly difficult for any country to forecast figures and policies of one year in advance and then go on to follow them to the hilt. These three factors are: (1) Events (political and economic) these days often unfold quicker than any type of planning cum forecasting. (2) In the supersonic age of globalization where communication and information flow is lightening fast, one year is being perceived as being too long a period in the context of day-to-day decision-making requirements. (3) In case of economies such as Pakistan, which balance their budgets by way of deficit financing, there is always the risk of donor or institutional promises that either do not mature at all or simply get deferred and delayed. So how should then one react to the once-a-year pompous budget speeches? Again, in my opinion, the real benefit of such an exercise to the general public lies in exposing the true mindset of the economic managers and that, behind the cobweb of complex figures, in which direction they want to take the nations economy. If the overall direction is right and the mindset is healthy (people-friendly) then great, and if otherwise, then the challenge is to somehow convince them to change course in order to avoid further economic suffering. Presently the Pakistani military is taking on the miscreants directly, but the real reckoning will come when the fight is over, in ensuring that insurgency and terrorism do not spread again. In that, the state of economy will be crucial, because if we are unable to win the hearts and minds of our people by providing them timely jobs and economic relief, the ground gained by the good work of the armed forces will be lost in days. And it is in this light that we should be assessing this recently announced budget. Meaning, does the direction the economic leaders have adopted take us towards creating opportunities, providing jobs, encouraging domestic and foreign investment, and eradicating poverty? Measuring on such a yardstick, regrettably, the announcements fall significantly short of creating any kind of positive feelings or generating a likely stimulus in the economy. Instead, what comes across through the 2009-10 pronouncements points to either the sustenance of old negativities or the addition of quite a few new irritants like: government levies whose levels have never been justifiable still remain intact (petroleum and now carbon in addition, etc); Tax collection targets amidst dwindling economic activity appear draconian to say the least; Stubborn reliance on the high interest rate monetary tool will continue to haunt the manufacturing sector even in the coming year. With the government resorting to increased internal borrowing in order to meet the budgetary shortfalls, the private sector is likely to be further isolated from due access to institutional credit thus exacerbating its problems. And with shrunk economic activity, the main sufferers will be the ones already living below the poverty line and the ones who will now be pushed afresh below this dreaded social line due to a further deteriorated equation between population growth and economic growth. However, in governments defence, there is no doubt that this was an immensely tough budget to compose. The security situation, law and order, fight against terrorism and the looming fear of resurging global commodity prices (especially fuel and edible oils) require not only substantial extra funds but also provisions for possible significant overruns. Such a scenario on one hand makes it extremely difficult to ascertain the real quantum of funds that can be needed to fulfill these obligations and on the other hand makes it even harder to arrange for the required resources due to not only the adverse fall-out of the on-going events on the economy and hence its reduced capacity to generate revenue, but also owing to the often unkept promises of donors and friends. To make matters worse, the main lending institution, IMF, has strict terms and conditions that demand reducing fiscal deficit and taming inflation, thereby leaving little room for the government to implement any sort of social welfare agenda. Lastly, the fresh challenge of the IDP (Internally Displaced Persons) presents a new serious situation requiring extra cash resources, which need to be arranged and disbursed immediately. Given the above circumstances and factors while one understands as to why the economic managers have opted to be conservative and unadventurous, one however did hope for them to be slightly more imaginative cum innovative in their approach. With inflation already taking a beating owing more to external factors than internal, it would have been prudent to ease industrial lending rates and compensate the fight against inflation by using other additional tools (of fighting inflation) such as, measures to break market monopolies and stock hoarding, supplementing supply side, shortening farm to market and manufacturing to market time frames, recreating market structures and distribution networks, etc. Also, instead of clever cover-ups an honest endeavour to come clean with the general public on the need for additional borrowing and transparency in governmental spending can always help build national support and remove distrust. Further, given the obese size of the government itself and the naked ostentatious nature of leadership expenses, it would have been nice to see a noble yet necessary gesture of meaningfully cutting non-developmental expenses. Hope, honesty and perception are cornerstones of successful economies and good policies invariably need to be linked to popular public sentiment in order for nations to survive and flourish