The greatly anticipated mini-budget presented by Finance Minister Asad Umer is a testament to the government’s efforts to boost the local businesses and industries. During the last couple of months, the stringent accountability narrative had isolated the community along with the agenda-setting that the government will not be pro-business in Pakistan. However, with an economy like ours, it is difficult to not cater to the demands of the business community in Pakistan because without their support, it is very difficult to bring Pakistan out of the current deficit it faces. This budget represents the government’s willingness to provide a better environment to local businesses and it is reflective of the hope that in return for these incentives, the business community will comply with the government to increase its revenue.

As many experts are pointing out, and also admitted by the Finance Minister, that this budget outlines several major decisions with respect to the economy. These decisions usually are not dealt with in the mini-budget, which is devised to address current problems to give the economy a boost. Despite that criticism, it is easy to discern that matters related to the economy, especially one facing a fiscal deficit, will require a major revamp sooner than later. If the government relies on the next budget for the fiscal year, it is quite likely that the developments by that time which could have been prevented in this budget will have aggravated. It is important for the Finance Ministry to be mindful of that.

The concern which remains, however, is that with the provision of such incentives, the country will lose out on a significant number of revenue streams. At the moment, the revenue collection for this year also falls behind target due to the lag in the government transition. The Federal Board of Revenue (FBR) has faced a shortfall of Rs170 billion in six months. This means that the annual revenue gap will be around Rs350 billion. This is a huge risk that the government is willing to take because they are providing the aggrieved business community the groundwork they need for growth. Without them realising that they need to meet the government halfway and start voluntarily paying taxes, this plan can make or break the government. A community which has rightfully pointed out that it needs a boost in order to save the economy now has a lot depending on them, while, the government needs to work on a contingency plan if this fails.