As always, all parties were seen to woo the undefined "common man" during the last elections campaign. Each party, however, has its core constituents. Once in power, their interests are served through policies rather than promises. The PML-N’s core constituents are those in the business of making money -- a lot of money. It had to appease youth as a reaction to the PTI’s appeal to this emerging bulge in our population. Packages for them were announced first. These were in the nature of promises to spend some public money, from the coffers of the government as well as the vaults of the banks. This irritant out of the way, the time was nigh to pick up the pieces from where the party had been booted out in the last year of the twentieth century.

The Cabinet Committee on Privatisation has already announced that business is not the business of the government. Towards the end of the last month in Karachi, the business hub of the country, tycoons and "Capones" were gathered to reaffirm the pledge: What is good for the business is good for the country. An incentives package was announced to free the business from the scrutiny of a tax machinery which is already serving as its B-team. The shamefully low and flat tax to GDP ratio speaks volumes for this connection.

There is no doubt that a high and sustained rate of investment is crucial to the achievement of a high and sustained GDP growth in an economy like Pakistan. It is also clear that the private sector has to take the lead. In the PML-N’s view, the private investor is constrained mainly by its reluctance to let the secret out on the sources of its financing. That is why a larger GDP is produced by the underground economy. In its first tenure, the party had adopted a ‘No Questions Asked (NQA)’ strategy. It did create a feel-good environment for money making. Fiscal years 1991-92and 1992-93 witnessed rates of investment above 20 per cent of the GDP. By its second tenure, the NQA strategy had lost its vigour, as it must, being an abstraction from the rule of law.

1998-99 was the last complete fiscal year of the second tenure of the PML-N government. According to the Annual Report of the State Bank for 1999-2000, GDP growth in that year was 3.1 per cent, fiscal deficit stood at 6.1 per cent and the current account deficit at 3.9 per cent. Total debt was almost equal to the entire GDP -- 99.8 per cent, 52.6 per cent being foreign. Total investment was 14.9 per cent, down from 17.9 per cent in 1996-97. Inflation at 5.7 per cent signaled an economy in decline rather than stability. This was the outcome of a system woven around overt fiscal concessions and covert tax evasion.

Privileges and connections rather than a level playing field paved the way to investment. Defaulting on loans was perfected into an art form. Informal money pumped into quick-yielding activities disappeared as soon as its political patrons left the field.

Tax amnesties in Pakistan have invariably failed to broaden the tax net. Instead of tax reform, most governments in their first year, and the last one in its last year, tried this easy option. There is a moral hazard issue here. Wealth owners sit tight on what they have for better returns in the next amnesty. The real issue is documentation which the businesses resist till death. In opposition, the PML-N blocked the imposition of reformed GST precisely because of this. Businesses dislike a tax that though passed on to the consumer yields information for the tax authorities on their own taxable income.

A significant feature of the incentives package is that monitoring and implementation is not left to the corrupt and intrusive tax man. The decision is that the leader should directly look after his constituents. A Business Advisory Council under the prime minister will meet every second month to secure the intended outcome.

The latest package departs from the past NAQs in that the laundered money is required to be invested in new or expanding undertakings set up on or after January 1, 2014. No limits have been prescribed. To ensure that it is not jobless investment, every five million invested must create one job.

While there is a negative list of ineligible investments and sources, the eligibility of the presently profitable fields occupied by friends and relatives have been specially mentioned. These include captive power plants, low cost housing construction and livestock in the corporate sector. Mining and quarrying in Thar, Balochistan and Khyber Pakhtunkhwa have been added to give a sense of participation to the smaller provinces. The chance that the whitened investors would come running for "koiley ki dalali mein munh kala" is next to nothing. The announcement of an Agricultural Advisory Council was also a balancing act. Corporatised livestock is the only area of interest in agriculture sector.

Other than the already barred industries of arms, ammunition and explosives, the negative list consists of old established industries such as fertilizers, sugar, cigarettes, aerated beverages, cement, textile spinning units, flour mills, vegetable ghee and cooking oil. I thought the idea was to diversify investment although the eligibility of textiles other than spinning is likely to work against it. Textiles share in the world trade and Pakistan’s share in the world textile trade has been declining. What has not been declining is the lobbying power of the textiles sector, which continues to be the largest player in manufacturing. The official explanation, given in a clarifying statement, is that the excluded sectors either have "excess capacity," which is fine, "or are anti-social", which is ridiculous.

Many would describe the whole scheme as anti-social. In the globalised world, domestic investor is not the only player in the field. Business conditions and regulations have to conform to the international morality of investment. This morality has undergone a sea change since 9/11.

There is, for instance, no room for the infamous Foreign Exchange/Currency Bearer Certificates issued in the earlier tenure. Transparency, accountability, disclosure and a new ethic are its essential element. Perhaps to reflect this change, the package denies immunity to proceeds of crime relating to offences under Narcotic Substances Act 1997, Anti-Terrorist Act 1997 and Anti-Money Laundering Act 2010. The provision, to say the least, is meaningless in an NQA strategy.

A disturbing part of the package is the reinforcement of privilege for the already over-privileged elite. Access to VIP lounges, fast track immigration, gratis passports and generous baggage allowance and, worst of all, immunity from audit and scrutiny of bank accounts go against the PML-N’s pronouncements to end the VIP culture. Or is it merely a passion of the younger Sharif!

In conclusion, one notes with regret that the political culture of promising one thing and doing the opposite continues. Look at what the PML-N’s manifesto promised: "We recognize that in order to improve the overall taxation environment, documentation of economy is fundamental. Once the documentation process is successful, the informal economy can be brought into the tax net and the tax base rationalised to broaden the tax system." Most unequivocally, the manifesto declared: "Steps will be taken to ensure elimination of money-laundering and whitening of black money." Perhaps, the prime minister never read the manifesto!