Editorial
As Pakistan edges toward another federal budget, familiar patterns are reemerging: stakeholders lobby for allocations, industry bodies clamor for incentives, and the private sector seeks lower taxes and interest rates to stay regionally competitive. But beneath the technical choreography lies a more troubling economic reality—one that refuses to be masked by cosmetic reforms or IMF-blessed cash transfers.
Despite government claims of stability, the economic foundations remain deeply fragile. Pakistan’s reliance on $16 billion in loan rollovers even as reserves hover at $14 billion, a shrinking manufacturing sector, and manipulated remittance data all expose a system teetering on the edge. The budget shortfall of Rs833 billion in the first ten months alone further weakens the claim of fiscal space made by the Finance Minister.
In this fragile context, awarding a 20–25% public sector salary hike—when much of the population suffers from inflation and declining purchasing power—is irresponsible at best, self-serving at worst. Repeated IMF programmes have shown that without structural reform, each bailout is merely a pause before the next crisis.
The Fund’s demands—phasing out elite exemptions, taxing wealthy farmers, and eliminating fuel and power subsidies—are theoretically sound but rarely implemented. More troubling is the regressive reliance on indirect taxes, which disproportionately hurt the poor. The BISP uplift, while commendable in theory, is undermined by manipulated inflation data and insufficient budgetary allocation.
Until the government curbs its own extravagance and begins reallocating resources toward Pakistan’s vulnerable population—raising BISP’s share from 3% to at least 6%—economic resilience will remain a distant ideal. Fiscal discipline and real reform, not rhetoric and short-term appeasement, must drive the next budget if Pakistan hopes to chart a stable course forward.
