easured simply on popularity, the Pakistan Democratic Movement’s (PDM) short stint in power has been a predictable disaster. In a March 2023 survey, Gallup found that 62 percent of the respondents out of a total 2,000 expressed dismay over the coalition government’s performance. More to the point, the respondents blamed the government’s inability to control consumer prices and its failure to re-establish a measuring of economic stability as the foremost grievance against the government.

The government can cite the exogenous shocks in the form of the Ukraine war and the catastrophic floods of last year as explanations for unusually poor economic outcomes. The unending negotiations with the International Monetary Fund that defy efforts at pinning the blame on either side also added fuel to the mix in this recipe for economic calamity. These explanations, however, are rarely effective in altering popular perceptions. This economic question, rather than the popularity of the Pakistan Tehreek-i-Insaf’s (PTI) political narrative, could determine the performance of the parties that together form the PDM government.

The federal budget for the financial year 2023-24 is, therefore, being judged as a significant last-ditch effort by the current government to resuscitate national economy, as well as, its own popularity, before the next general elections. Even a cursory study of the budget reveals that in the immediate future, it is the latter that the government aims to achieve from the budget than the former.

If the budget is indeed a liability rather than a populist exercise, as claimed by some government leaders, there are some hard to explain anomalies. For instance, despite the precarious revenue and debt situation, the government expenditure has been increased by about 50 percent to Rs 14.4 trillion compared to last year’s Rs 9.5 trillion. One can argue that a substantial portion of this increase will go towards debt servicing that has seen a massive increase during the recent years, further exacerbated by the worsening exchange rate of national currency. However, even the development expenditure has been increased by about 100 percent and the subsidies are billed at about a trillion rupees. The latter expenses – admirable in an economy not suffering from huge fiscal and current account deficits, even prudent in short-term political considerations – hardly look like the expenses of a state seeking to consolidate in economic turmoil.

Such an increase in expenditure, and its impact on fiscal deficit, could be understandable if the budget had clearly outlined where the revenue would come from. However, although the tax target after provincial allocation is projected to be almost 37 percent higher than last fiscal year, the finance minister stated that no new taxes had been imposed in the budget. Even if the economy does indeed grow by the projected three and a half percent, one cannot see, in the absence of new taxes, where such an increase in revenue would come from.

The raise in the salaries of public service officials reflects the rate of inflation during the past year. However, in the context of low revenue, it also sounds like a step aimed at the elections.

So, the question remains: will this budget help the ruling parties in their electoral strategies?

An absence of concrete steps to address inflation and control consumer prices is perhaps the weakest part of the budget. Rising prices have been a major concern for the people. The government’s failure to effectively tackle this issue may undermine its electoral prospects. At a time when people are struggling to make ends meet, the budget’s failure to provide relief in the form of price control measures or subsidies on essential commodities may be viewed negatively by the electorate.

Some critics have also argued that the measures are not sufficient to address the deep-rooted economic challenges faced by Pakistan. The government’s failure to introduce new taxes or outline clear revenue-generation strategies raises concerns about the feasibility of meeting the revenue targets. Without a substantial increase in revenue, the government may struggle to finance its ambitious expenditure plans, leading to further strain on the economy.

Some allocations have been made to promote agriculture and foreign investment. However, these sectors, which can be critical for an economic recovery, suffer from structural issues. Agriculture has been hurt by a long-term inability to keep up with the global techniques. It has also been hit by natural disasters. Foreign investment calls for a political, security and administrative environment for which successive governments have shown little commitment, even understanding. Any prospects of growth and stabilisation of the economy would need these two sectors to be at the forefront of the government’s efforts. However, the budget does not make clear how these improvements would be achieved in the coming year and beyond.

The expansion in public spending can worsen our fiscal balance crisis. The government will be forced to borrow either from domestic banks or from foreign sources. Any efforts to provide significant subsidies will be looked at with suspicion by the lenders, especially the IMF. It is difficult to see therefore how the PDM parties will benefit politically from the budget to a significant degree.

The writer is an assistant professor of political science at the University of Peshawar. He can be reached at aameraza@gmail.com