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Pakistan’s Ruling Elite’s Excessive Spending Threatens Economic Stability

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The recent request made by the Pakistani government for the National Assembly’s approval to borrow a massive Rs34.6 trillion for the next fiscal year has raised serious concerns about the ruling elite’s grasp on the severity of the economic crisis facing the country. This amount, part of an obligatory expenditure bill, is intended to meet debt repayment and servicing needs, as well as the operational expenses of various constitutional state organs.

A significant portion of the allocated budget is earmarked for domestic and foreign debt repayments and servicing requirements, displaying the staggering magnitude of the country’s debt burden. Shockingly, budgets for state organs such as parliament, the Supreme Court, the presidency, and the Election Commission of Pakistan are set to increase by 22 per cent to 63 per cent compared to the outgoing fiscal year. This considerable surge in spending underscores the ruling elite’s audacious approach to maintaining their lifestyle while placing the economic burden on the citizenry, particularly the salaried class and corporate sector.

Despite rhetoric from government officials about curbing excessive spending and implementing austerity measures, the stark reality contradicts their claims. The exorbitant budget requests from state organs, including a 62 percent increase in the presidency’s budget, demonstrate a lack of commitment to the promised austerity measures. The government’s failure to substantially reduce expenditures raises doubts about its sincerity in addressing the economic crisis.

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Moreover, the reliance on borrowing to finance these expenditures will further exacerbate the country’s debt burden. This move is particularly irresponsible considering the economic challenges faced by lower income groups, who are already grappling with inflation and indirect taxes. The ruling elite’s insistence on extravagant spending while neglecting fiscal discipline poses a significant threat to the country’s economic stability.

In conclusion, the Pakistani government’s failure to rein in excessive spending and address the urgent need for fiscal discipline undermines the prospects of economic recovery. Without a drastic shift in the approach of the ruling elite, the economy is unlikely to overcome its current challenges in the near future.

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