Business community raises concerns about national budget & authorities must address them. The government ally , PPP also unhappy Closing eyes on their objections can cause serious implications.
The government presented an annual budget with an outlay of Rs. 18.877 trillion, setting an ambitious revenue collection target of around Rs. 13 trillion (46.66 billion USD).
Surprising to all the PML-N president Nawaz Sharif himself didn’t attend the budget proceedings. Mr. Sharif reportedly didn’t have any other engagements that could hamper his presence here. Even if it had been so, it should not have been more precious than this budget that sets the direction of his government. His absence left several questions including: Is Mr. Nawaz satisfied with this budget or does he too have differences with his government over this budget? Was he not ready to face the opposition or was he more interested in the provincial budget of Punjab where his daughter is in charge?
His absence in this session indicates the priority of this exercise to him whatever the reason was behind it. It embarrassed the PML-N leaders as well. Federal Minister Khurram Dastgir Khan in a TV show said Mr. Nawaz should have been present in this session when questioned how this party’s president could miss it.
He also realized that this budget has some problems. He defended the budget the best he could but had no answer when told the levy on petroleum in this budget was enhanced to Rs 80 from 60 and it will cause a rise in the prices of daily use commodities. Currently, the inflation rate is nearly 12 percent and it could increase.
Another surprise to the public was the absence of the PPP chairman Bilawal Bhutto-Zardari in this budget session. This obviously marks that to what extent this major ally of the government is owning this budget. The PPP voted for the PML-N in all positions including when Mr. Shehbaz Sharif was elected as the PM.
The PPP initially boycotted the budget session, citing an alleged violation of a power-sharing agreement claiming it was violated in the budget preparation process.
With the hectic engagement of Deputy Prime Minister Ishaq Dar and a spirit to address the concerns of this party, some of its leaders attended this session.
Khursheed Shah, Naveed Qamar, and Ijaz Jakharani were the PPP lawmakers who attended this budget session. Khursheed Shah almost two days earlier came up with words “The government neither told us anything related to the budget nor took us into confidence. We don’t know what the PMLN is doing about privatization policy, taxes, and developmental programs. We are unaware whether the government is preparing a budget of its own or at the commands of the IMF and for the IMF.” It was reported that Bilawal agreed to send three PPP members to the assembly hall just to mark token participation.
The parliamentary meeting of the PPP had a consensus on completely boycotting the proceedings to register their protest. The PPP Vice-President Sherry Rehman said the PPP supported the formation of the government in the larger national interest. The government should keep the PPP informed about matters like the budget, she said. A general discussion on this budget will be held from June 20 to 24. The debate on cut motions is scheduled for June 26 and 27, and June 28 is designated for the discussion and approval of the Finance Bill. The approval of the finance bill is a matter of death and life for any prime minister.
The government is required to settle all issues with its allies before the time comes when this Bill will be passed. If a budget is not passed then the Prime Minister has to leave. How the government will settle or address the concerns of the PPP is a bigger challenge. Currently, all the important positions of the government belong to the government. Premiership, deputy premiership, speaker of the House, foreign, interior, and finance ministries are all booked. The government is not in a position to bargain with the interior and finance ministries. Now what is left for the PPP and how its concerns relate to this budget is a question.
The members of the opposition protested by blowing whistles, and trumpets, tearing up copies of the agenda and budget documents, and raising slogans. They called this budget the anti-people budget. Jamaat-e-Islami (JI) also stands against this budget calling it a document of the IMF’s slavery. It said the government’s failure to meet the previous economic targets proves its inability to address the economy of Pakistan.
The business community also expressed concerns over the credibility of this budget. They call it an anti-industry and an IMF-branded exercise. The trade and industry leaders called it a burden on existing taxpayers. It marks serious gaps to broaden the tax base or promote industrial production and commerce, they said. Islamabad Chamber of Commerce and Industry President Ahsan Zafar Bakhtawari said instead of expanding the tax net, the government has set an ambitious tax target of rupees nearly 13 trillion. It would further burden the existing taxpayers, he said. Importantly, the government is expected to fall short of its tax collection target for the current fiscal year, as the JI chief has also pointed out.
They suggested the government should focus more on the country’s important and vibrant tourism sector, as it has the potential to generate significant foreign exchange. Abdul Aleem, Secretary General of the Overseas Investors Chamber of Commerce and Industry (OICCI) was reported saying the new tax collection target and a GDP growth of 3.6 percent are ambitious but indicate the government’s positive direction. He pointed out the budget lacks measures to bring agriculture income and real estate into the tax net. He said the salary increase for government employees – a 20 percent increase in salaries of grade 1 to 16 employees – will largely affect the pension costs. Currently, the country is facing at least 5.3 percent of the income going for the pensions of retired government employees. Similarly, Ehsan Malik, Chief Executive Officer of the Pakistan Business Council, President of Karachi Chamber of Commerce and Industry, Iftikhar Ahmed Sheikh, and Chairman of the Businessmen Group (BMG), Zubair Motiwala said this budget is unfriendly to the industry and aligned with the IMF due to the 48.7 percent increase in revenue targets. This increase will surely will impact society and lead to increased production costs.
Chamber of Commerce and Industry (RCCI) President Saqib Rafiq said the increase in the tax slab to 45 percent was unacceptable. President LCCI Kashif Anwar said the budget was not beneficial to the economy. He said imposition of federal excise duty on cement and property, as well as import duty on glass, would affect business. Raising the advance tax from one percent to 2.2 percent on the supply chain would increase costs for manufacturers and retailers. Increase in sales tax rate from 12 percent to 18 percent for retailers would affect the economy, he said. Zaki Aijaz Qureshi, the FPCCI vice-president said there are measures for export promotion, reduce imports, privatization policy, and the elimination of cross-subsidies in this budget.
This is how the budget among the concerned is being taken. Now for the government, the challenges are hovering around. How this government will fix them all and satisfy its alias to get this budget passed is being awaited.
(Author: Rana Kashif)