People these days cannot be fooled easily. Yes, for example, they are impatient for a solution to our energy woes, but they also want to be assured that the menace of circular debt once temporarily finished by printing money (an ultimate burden on the people anyway through inflation) will not re-emerge to haunt them again. Energy being at the heart of the economic revival plan, perhaps it will be a good idea to transparently share short, medium and long term plans and again make use professional management structures to implement tough short-term decisions that the government on its own may otherwise find hard to exercise. Also, with this sector already laden with numerous scandals in the recent past, it is advisable to avoid at any cost the element of ‘conflict of interest’ for people working on the ‘forward plan’ in the energy sector; the Stock Exchange may be booming, but it does not necessarily spell a ‘good’ for the economy. This Shaukat Aziz yardstick for economic revival proved to be terribly wrong, as in our case what it meant was that it mostly represented a bubble, a piling up of mere paper capital and, that too, in a very few select hands, productive funds going into unproductive use represented through untaxed transactional profits, while no real value creation was taking place, and it primarily served as a conduit to whitening money thus indirectly aiding the undocumented sector; is it prudent at this stage to be even talking about FBR’s direct access to personal bank accounts, which could mean flight of capital, a partial run on the banks and an erosion of an already thin savings base in an environment where the banks struggle to keep up with their deposit to lending ratios; not mere lip service but disclosure of real plans on how the government intends to stop using the SBP as a fiscal source in order to allow it return to its basic primary function of managing the monetary policy; why are the sizes of the all budgetary outlays growing much more than the benchmarked inflation and growth percentages in a period when the country is extremely cash strapped; does there exist enough elasticity at present between the interest rate and investment correlation to justify another reduction of 100 basis points? Meaning, will it bring in enough new investment to justify the negative effects on savings, pressure on the Pak Rupee and resultant inflation; and last but not least, given that our present economic impasse to a large extent is stemmed in the prevailing security situation, is it wise for a mature government to even try and link GST increases to outlays on defence/security requirements? Now one may ask that how does all the above fit into the budgetary announcements? The answer is that unlike 15 years ago we are today in an age of economic connectivity and global inter-linkages where problems cannot be tackled in isolation and the budget is no exception. Direction and perception of things moving in the right direction create their own dynamics in building up an economic revival momentum. What one would like to see is the government to challenge itself. Revenue drives should have been based more on confidence to reduce PSO losses, gradual reduction in provincial grants to burden them to contribute their fair share in improving overall tax to GDP ratio (Indian style), policy endeavours to enhance exports and to stimulate documented economic activity instead of disturbing an apple cart that is already contributing productively, and seeking to lure the non-contributing undocumented sector in the tax net. This budget regrettably tends to do the opposite. It is important to remember that revenue collection is as much an art as an accountancy exercise and without first undertaking the long overdue structural reforms in the FBR the announced taxation measures tend to further burden the existing taxpayers, promote an undesired ‘belly’ taxation curve that unfairly lays the bulk of the burden on the salaried and middle classes, stoke inflation and unleash a wave of corruption by further reducing the distance between the taxpayer and the collector - for example, under the current sales tax system the authority of collection, refund and adjudication are all concentrated in the same department and one does not have to look too far back to see that the absence of zero rating stifled the legitimate businesses and even the government at the time suffered since it ended up refunding more than it collected! Finally, the lack of any innovative approach on important modern day global growth drivers such as green initiatives, currency swaps, etc just goes down to show that, perhaps, the economic managers are still stuck in the time warp of the 90s. Interestingly, the economic manifesto released by the PML-N prior to the elections was not only a very comprehensive document, but also allayed most of the concerns mentioned above and one fails to see how and why they have deviated so soon from a strategy just recently formulated by their own team? On a positive note, these are early days yet and one hopes and prays that as they go along over the next five years they will be willing to listen and learn!

The writer is an entrepreneur and economic analyst.