The Ministry of Finance is focused on weighing the demand for scarce resources from all the ministries and sectors of the economy, including institutions like the armed forces as well as bailout packages for heavy loss-making units that include Pakistan Steel, Pakistan Railways and Pakistan International Airlines against its revenue base which remains limited that many believe is due to the sustained failure of successive governments to reform the tax structure and administration with a view to creating greater fiscal space. At present, the focus of the incumbent government, like its predecessors, remains on current expenditure, which is rationalised by pointing out that the ongoing operation Raddul Fasaad requires a major annual outlay. The fiscal space generated due to a massive decline in the international oil prices, consistently pointed out by the International Monetary Fund under the three-year 6.64 billion dollar Extended Fund Facility, has been frittered away by a commensurate rise of imports of non-essential items. With borrowing shoring up our foreign exchange reserves, the capacity of the Ministry of Finance to fund an ambitious election year development budget has been seriously compromised. The Planning Ministry, in contrast, does not overtly concern itself with where the money would come from but more on the development projects that are regarded as critical and have the capacity to generate employment opportunities as well as fuel the country's growth rate.
This disconnect between the two ministries has assumed greater relevance during the Sharif administration given that the Planning Minister Ahsan Iqbal has been partial to projecting visions that span well beyond two tenures of any administration, not yet witnessed by a civilian dispensation in Pakistan, and hence his proposed PSDP as a component of the budget are almost regarded as unrealistic.
What is, however, extremely disturbing is that during the past few years the budget document's applicability, meant for the entire fiscal year, has come into question soon after it is announced. That the ongoing fiscal year is no different was evident from the facts as acknowledged by the Ministry of Finance officials: the budget deficit would be around 5 percent, at least 1.2 percent higher than the budgeted 3.8 percent, and the mark up of Public Sector Entities was only 8 billion rupees in the first six months of the current year against the budgeted 81 billion rupees for the entire year, 12 billion rupees was realised as dividends for July-December 2016 against the budgeted 85 billion rupees and only 28 billion rupees was collected from the Gas Infrastructure Development Cess July-December 2016 against 145 billion rupees budgeted for the current year.
The question that merits an answer is whether or not the budget is wilfully of limited applicability? Unfortunately, the scale and extent of data fudging as repeatedly pointed out by independent economists leads one to conclude that as the Pakistan Bureau of Statistics comes under the administrative control of the Ministry of Finance, data fudging is deliberate. This view is strengthened by the fact that repeated requests by the media since June 2013 for a meeting with PBS officials have yet to materialise.
Copyright Business Recorder, 2017