The budget… again

And so it happened – again. November 30 saw another mini-budget, another ridiculous claim that it would not have any effect upon the ‘common man’ (has anybody ever found this elusive species in Pakistan?), and we see the same old stories and methods repeated again.

It was funny as well as ironic to watch the finance minister standing in the National Assembly trying to levy new taxes under the garb of helping the IDPs of Waziristan. If I am not wrong, the operation in Waziristan has been going on for more than a year now. And yet in all this time, the finance minister and his team could not figure out the cost of repatriating them to their homes. This speaks of poor management and calculations gone haywire rather than the effect of any unforeseen calamity that necessitated this clamp down of further taxes.

This mini-budget reminded me of my article in these pages a day before the annual budget for this year was presented, and the finance minister’s angry response to it. The article itself garnered a very positive response, which was a bit surprising because not many in Pakistan seem to be interested in these issues.

I guess it was a testament that there is a general acknowledgement among the masses (at least the readers) that status quo won’t do anymore. But this want for change, unfortunately, is not on the priorities of those who govern and make economic policies. This was evident from the angry post-budget press conference of the respected finance minister. In his anger, the FM ended up confirming what I stated in that article: that annual budgets are a futile exercise, a waste of time and resources.

Back to the budget debate. I had argued in my previous article that annual budgets are a futile exercise and waste of resources. My point of view was confirmed by the respected finance minister, indirectly, in his very angry post-budget speech. He talked, for example, about the Rs480 billion paid against circular debt (they are not a part of budget, said the minister) and tendency of prices to rise before budgets (they will not be ‘allowed’ to rise, thundered the minister).

That was exactly my point; if substantial amounts like Rs480 billion can be doled out without resorting to the budget exercise, then what’s the need for the whole exercise? Regarding prices, within a day or two of the budget’s presentation, the prices had recorded a substantial increase. Just the price of chicken shot up by Rs90 per kg. All the price check committees and administrative orders could not prevent prices from rising.

Within a day or two of announcing this mini-budget, the prices of almost all commodities have risen again. You don’t need the stats of the Pakistan Bureau of Statistics (PBS) to confirm this trend. Consumers need only to travel to the nearest market to confirm this fact.

The moral of the story: PBS inflation stats are not trusted by many, and prices variations are not subject to administrative orders or price check committees. Rather, the forces of supply and demand determine prices.

If there were any conceivable advantage from carrying out this yearly exercise, that advantage would have been apparent by now. But I cannot see what advantage this useless exercise confers upon the exchequer and the people of this nation. Rather, as I pointed out in my earlier article, it is a waste of resources and time. Yet at we carry on with this futility year after year, going through the same motions again and again. Pick up the speech of the respected finance minister when he presented the budget this year, and all the stratospheric level claims that accompanied it. Within a quarter or two, all those claims have pretty much bitten the dust. And we have been compelled to enact new measures to stave off fiscal disaster.

It was quiet ironic to watch him plead his case for new taxes in the National Assembly since we’ve been hearing him repeatedly claim how the government has brought about macroeconomic stability. If the economy is stable, then so should be the finances of the government. And lest I forget, our psyche has been repeatedly bombarded with the ‘record reserve’ jingle. But what good are the claims of macroeconomic stability and record reserves at a time when people are being burdened with newer taxes and debts beyond imagination? Who is going to pay the massive debt that has accumulated over the last seven and a half years of democratic rule?

As I write these lines, the annual budget circus has begun again. Budget circulars must have been circulated and government departments are now in the process of coming up with even more innovative ways of asking for more money in the next budget. The next budget, as always, will be bigger than the previous one; it will also be accompanied by pompous proclamations.

The end result? Zilch – and more misery for people. Even funnier is the fact that the government departments, both at the federal and the provincial level, end up spending hardly half of the budget that they ask for. And if one could lay one’s hands on fiscal releases, an interesting picture will emerge, showing that the majority of fund utilisation occurs in the last few months of the fiscal year.

The logic, from the point of view of the bureaucracy, is simple: why surrender budgets at the end of the fiscal year when we can spend it without many questions asked about the way the money is utilised? This is precisely the reason such gems as the expenditure of government resources for buying gold and throwing lavish parties come to surface. Why on earth would a ministry buy gold, and spend anti-terror funds on lavish parties? If our finance ministers had, over the years, taken care of these sorts of things, then the need for new taxes would not have arisen. Oh well, as they say, it’s no use talking to walls.

The fact is that one just cannot tell what the future has in store. All kinds of uncertainties lurk in the shadows. Take, for example, the recent earthquake that caused considerable damage. Did anybody anticipate it? No. And it ended up disturbing the fiscal operations of the federal and provincial governments. Therefore, pronouncing monetary outlays for one year in advance makes no sense at all.

On the day when this year’s budget was being presented, I happened to see a report on a news channel. The TV journalist managed to travel to the hallowed halls of the National Assembly where a sad spectacle awaited her.

Thousands of unopened, printed versions of the last year’s budget, meant for our august parliamentarians, were lying in a store that had water standing in it. The journalist had one simple question to ask (like I do): if this is the end result of all this, then what’s the use of presenting budgets?

The writer is a freelance contributor.

Email: shahid.mohmand@gmail.com

Twitter: ShahidMohmand79