A challenging budget
All and sundry in the country are keenly waiting for the upcoming budget. This will be very important as well as challenging for the government of the day. Generally, the coronavirus pandemic has made it difficult for all countries to manage economy, and particularly for Pakistan. Never in history of 73 years such kind of pressure was felt while presenting annual budget, like this one for the fiscal year 2020-2021.
The Federal Board of Revenue estimates a revenue loss of Rs.450 billion in the first quarter (July-September) of the next fiscal year in case the partial lockdown remains. In case of an extension in the lockdown, the tax body will see another shortfall of Rs.350 billion. The government plans to set revenue collection target between Rs.4.5 trillion to Rs.4.7 trillion in the budget for fiscal year 2020-2021. The final decision was to be taken after discussing the plan with International Monetary Fund (IMF).
Overall economic indicators are sliding downward and showing negative trend. Exports are at halt from past six months. Tourism sector is entirely closed for both internal and external visitors. Flight operations are stopped and adding more losses to exchequer. Inflow of remittances which is an important source of foreign exchange is showing dismal picture due to lockdown all over the world. Investors are getting back their investment due to fear of heavy loss due to prevailing uncertainty after pandemic. Moreover, business activity is at lowest ebb in the country. Thus, whole emerging situation after the corona virus spread, has badly affected collection of revenue and set target of the year.
Already, the Gross Domestic Product (GDP) during the last six months has been reduced to Rs. 41.3 trillion, from Rs. 44 trillion. There are apprehensions GDP can further reduce, if lockdown amid coronavirus prevailed for next few months. All these facts and health emergency prevalent today in the country are making it difficult for government to lay out policy as they did in the past. Budget is likely to be unveiled in the National Assembly on Friday. Thus, this historic budget will set the motion and way forward when Prime Minister Imran Khan is persistently opposing lockdown, and also warning the nation of peak in cases yet to come in July and August.
What actually will be offered as a relief to ordinary people in budget is unclear? How government will sustain pressure of IMF and their set condition? Is this budget will ensure compensation to all those who lost their earning source? Or this budget will overburden ordinary people to repay the debt to IMF and other international lenders. The answer to these questions lay with budget to come in few days. Yet, it is important to mention here that people expect in such a challenging time socio-economic protection as well as sound health conditions.
It is an undeniable fact that leadership emerges in testing time. Such time actually works as historic moment for leadership. During that time one can emerge and even loss his worthiness in the eyes of his people. So, coronavirus has given that opportunity to the Prime Minister when he can rise or can be membered as a failure due to global pandemic. In order to cash this opportunity what he needs is to lead from front.
For instance, Jacinda Ardern, prime minister of New Zealand is undoubtedly a successful world leader. She led the fight against coronavirus from the front, and stood strong and steadfast in her decisions amid the pandemic. Resultantly, from past few days there is no infected patient in her country, and they are still observing lockdown, and screening of the people who are coming from abroad. Likewise, Imran Khan needs to come ahead when our country is still few weeks away to touch the peak in number of reported cases.
Previously, a premature resumption of business and a few other sectors were given permission to carry their activity. Knowingly or unknowingly that decision from government was a mistake as per medical experts because mantra of social distancing came to an end by that way, and surely could bring an exponential surge in cases in the country. What was feared before easing lockdown, came us in no time and today we are at number 15 in the world as per total reported cases. In addition, our economy is gradually moving toward ‘banana economy’.
There are still few days when we will have new fiscal year. It is time for the ruling class to sit at the top and should not repeat the errors made in the past. Their decisions must be people centric as well as bold enough to stem the spread of virus in country. There should be consensus on it that we are in health emergency which must be averted by preferring health of the people than anything else. For that purpose, issued confronted by doctors and paramedics be solved on priority basis in order to encourage them in fight against global pandemic.