‘Normal Vanilla’: Fiscal Experts Opinion on 2023-2024 Budget – Pakistan


In short, the country’s leadership and this economic team in particular appear to lack intention and ideas.

In an unusually quiet parliamentary session on Friday evening, Finance Minister Ishak Dar presented the budget for 2023-24 totaling Rs 14.46 trillion.

With no new taxes and significantly higher salaries for civil servants, the budget will focus on “the real economy factor” rather than “an election budget,” Dahl said.

Dawn.com We asked leading economists and commentators for their opinions on the budget. Here’s what they said:

cover the deficit with debt

Political economist Uzair Yunus said, “This budget is proof that this government has given up on bailing out the economy.” The goal is to smash future possibilities by having those in power later this year deal with the aftermath of this ongoing crisis. “

“The only thing that this budget can tell us is that the debt deficit will continue, bringing more inflation and suffering to the public in the coming months,” he added.

Journalist Metab Haider agreed, saying the budget figures, especially non-tax targets, were “unrealistic”.

Economist Ali Farid Khwaja, meanwhile, said: “So far, it looks like an honest budget, not the populist or unrealistic budget that has been.” [have been]”

Fahad Rauf, head of research at Ismail Iqbal Securities, had a similar view. “This doesn’t sound like an election budget full of populist behavior, except for increased civil servant salaries.

“So far, we have not seen any major deviations from the policy of the International Monetary Fund (IMF).”

good but imperfect news

“The finance minister’s budget speech probably reflects that the economy intends to move towards further liberalization, such as tax cuts, import tariffs and easier financing for production activities, which is not a bad thing. No. There are a number of encouraging initiatives, such as the elimination of import duties on solar panel batteries and imported seeds, and the elimination of new taxes on industrial and agricultural machinery,” said economist Dr Asma Haider.

“It would be good if freelancers and IT exports were exempt from taxes. The IT sector should get SME status and pay very competitive salaries. Good news for fledgling entrepreneurs: The government hopes to finalize a staff-level deal with the IMF, but recognizes that even with an IMF program, our fiscal space is fragile. So this expanded budget will be very difficult for the government in the coming days,” she warned.

“Some popular but unnecessary measures could be avoided, such as the laptop scheme and higher Higher Education Commission (HEC) development budgets. It would be wiser to redirect them to the primary and secondary education they are receiving.

“The issue of debt repayment is not clearly presented and is somewhat ambiguous. It increased from INR 1804 billion in 2023-24 to INR 1804 billion in FY2023-24,” added Haider.

no plan for recovery

Economist Ali Hasnain argued that the budget seemed reminiscent of previous PML-N policies and offered no new ideas for a road to recovery.

“The Finance Minister’s statements over the past two days and the broader content of the federal budget revealed today have not been understood by the current government and the country’s broader power elite in the face of an ever-growing economic crisis. “There is no end in sight,” he said.

“At a time when the country needed to clarify its recovery plans, he gave a good chunk of his speech to the opposition, which was ousted from power over a year ago and recently removed from political relevance, to our I chose to spend my time holding the blame for the problem.

“Yesterday, the minister said the rupee should appreciate, citing a statistic he consistently ignored during his previous term and claimed to understand less than last year, the real effective exchange rate (REER). repeated the belief of

“Revenue measures uncovered today – such as amnesties for certain source declarations, temporary ‘windfall’ taxes, and the creation of a tax on undeclared cash withdrawals – are similar to past PMLs that have generated economic returns. -N measures echoed echoes. It had distortions and could not fix structural issues. Difficult but obvious efforts to reduce tax evasion, energy theft and public losses continue to be sidestepped.

“In short, the country’s leadership, especially this economic team, seems to lack intention and ideas.”

“more of the same”

Senior journalist Afshan Subohi said: “Mr Dahl has put forward a tax-exempt election budget of 14.5 trillion rupees without any convincing financial backing.” Dawn.com.

“Promised Relief – Increase Benazir Income Assistance Program to Rs 450 billion, Raise Minimum Wage from Rs 25,000 to Rs 32,000, Temporarily Increase Salary of Grade 1 to Grade 16 Civil Servants to Rs 35,000 17-22 civil servants, a 17.5% increase in civil servant pensions and certain preferential treatment for young people may be good, but the majority will be able to cope with their financial difficulties on their own. I have to.

“Government employs just over 3 million people, less than 2% of the roughly 241 million population coping with historically high levels of inflation,” he said.

“The minister pointed out that political instability was one of the main factors behind the economic collapse, but did not say anything about what the ruling government has done to make the future more predictable. could have announced an expected date for the dissolution of parliament to limit speculation,” he added.

“He hoped to revive the IMF program based on the MD’s verbal guarantee, but did not mention how the country would deal with its devastating $25 billion debt if for some reason that did not materialize. didn’t.

“Overall, the budgets are about the same. Emphasis on promises, but less on strategies that actually provide people with peace of mind and create trust in providing a better business environment for growth actors.”

Additional information from Reuters.

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