Negotiations with the IMF have concluded and the next tranche will be released soon.
Mini-budget is anticipated with a further squeeze of ordinary citizens through indirect taxes, particularly in the energy sector, that may yield a couple of hundred billion rupees. Imminent default could be avoided. This is the likely scenario for the next couple of months, but then what? Nothing.
With a constant budget deficit forecast to stay over 5% in the coming years, consistent inflation of around 20%, if we go by official numbers, a dwindling exchange rate and $21 billion repayment of foreign debt still due, where are we heading to? Can this mini-budget and IMF tranche solve the problems? Not.
Have we developed any medium to long-term plan for mitigation and response to this economic crisis? Not.
Are we raising voices in the absence of such a plan? Even if we are, are these being noticed by the quarters concerned? Not.
However, like a few other concerned citizens, I would keep at least filling the Monday pages of newspapers as there is not much economic activity otherwise to be written.
It would be easy for the finance minister to say, what are the alternatives? There are many, sir.
Please let the nation know what happened with the super tax and how much the national exchequer would have gained had we implemented it in true letter and spirit. More than this mini-budget, sir. However, it is easy to squeeze an ordinary citizen than powerful corporates.
Please let the nation know how much we can squeeze from the non-development public expenditure at this point and how much we spend on the perks and privileges of the powerful ones. More than this mini-budget, sir.
However, it is undoubtedly easy to squeeze the general public. And many such black holes are eating national resources, but no one touches them.
Let me present a suggestion for bridging the current fiscal gap, despite knowing that it wouldn’t even be noticed.
Rather than luring overseas Pakistanis with returns on investments that are unsustainable in the long term, why don’t we reach out to the corporate sector and issue the “Pakistan Stabilisation Fund”, whereby big companies, particularly the banking and telecom sectors, which have minted unprecedented profits in recent years, invest in this fund for reasonable returns on investment and a long-term tax credit to be used over the next ten years.