Budget Cuts

In a meeting hosted by the PM of Azad Jammu and Kashmir (AJK), Sardar Tanveer Ilyas, it was decided by the regional government that it would not present its own budget for the new fiscal year in light of the ‘enormous’ cuts in the budgetary grants by the federal government. Claiming that it would hinder the fight for independence and jeopardise development within the region, ministers expressed their dissatisfaction over the new developments. Given the economic constraints within which this budget was released, it is vital that the federal government looks to overcome any grievances and explains that cuts were experienced by most sectors, provinces and ministries, not just AJK alone.

The budget for AJK was slashed by Rs.5.2 billion in total, prompting immense opposition from the region. Noting that most of the development work had been completed against this amount, questions as to how the costs will be recovered were presented along with tensions that shifting this burden onto next year’s allocation—whatever it may be—will be detrimental for the region. Furthermore, the government of AJK also highlighted the strategic importance of the region, especially in the face of growing Indian aggression, and demanded that the government reconsider the budgetary allocation.

While some of these concerns are legitimate, it is vital to understand that similar ones are being expressed by other regions and ministries as well. The health ministry, arguably one of the most relevant and important ministries given the current global health crisis, also experienced a budget cut from Rs.154 billion to Rs.19 billion. These are just decisions being taken in light of the immense pressure being put upon the government by the IMF, as well as the downward spiraling economy. Pakistan has far too many debts to repay and little revenue through which it can fulfill such obligations. Furthermore, a reduction in subsidies and an increase in taxes is also a burdensome and unpopular decision that has caused inflation to skyrocket but it was one that needed to be taken.

For far too long, governments have been shying away from timely action. Now that the PML-N government has decided to take the hard decisions, it must also put across the reasons for why it is taking such harsh steps and reassure relevant stakeholders of the situation. We are living through a national economic crisis and animosity between the government and regional authorities will only create more trouble. It is vital that this is discussed and resolved at the earliest.

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