The PTI government is preparing another mini budget to present to the parliament. Finance Minister Asad Umar indicated this while giving briefing to the senate committee on the state of economy and negotiations with IMF. He blamed the unsustainable high level of current account deficit for the possible mini budget. “Yes, there is a proposal to increase taxes and tariffs but nothing has been finalized yet,” said the minister.
He also disclosed that Pakistan has secured $3 billion loan from Saudi Arabia at 3.18% interest rate. The Saudi oil facility on deferred payments will also become effective from next month when Pakistan will start receiving $274 million oil on a monthly basis. “The money bill, most probably, will be presented to the Parliament in early January,” said the finance minister, without disclosing the tax measures his government will impose on the people.
He briefed the committee about the pace of economic reforms, suggested by the IMF in return for providing a second bailout package in the last five years. The minister said the fiscal deficit at the current level was not sustainable, which was one of the concerns of the IMF.
PTI government will present its second mini budget in the parliament. When the first mini budget was passed in September, the finance minister assured us that the fiscal crisis was over. The government ministers repeatedly said that there is no fiscal crisis in the country.
After the committee meeting, the finance minister said the mini-budget is being prepared in light of the recommendations given by the Economic Advisory Council. Responding to a question whether the government should wait for the next fiscal year’s budget, the minister said there was no need to waste time.
The poor performance of the Federal Board of Revenue (FBR) has forced the government to take the politically costly decision of bringing the second mini-budget. The FBR is lagging behind in its revenue collection targets. The FBR is likely to miss the target of revenue collection during the fiscal year of 2018-19.
The mini budget is not a good news for the poor and lower middle class people as it would increase prices and inflation. The PTI government is simply shifting the burden of the economic crisis on to the poor masses. The mini budget is a clear indication that PTI lack the clarity in the economic policies and ordinary Pakistanis are paying the price of this ad hoc ism.
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24 August, 2019