Pakistan in Need of People-friendly Budget

The government has announced that it is not going to introduce any new taxes in the upcoming budget. Besides this, it has shown intention to increase spending on education and health. However, these measures are not enough to make it a pro-people budget if GST on kitchen, food items and other essential commodities of life is not brought down to 5% level.

The middle and lower income groups in Pakistan are probably the most-taxed people on earth, as 80 percent of revenues are obtained through levying indirect taxes. The next 20 percent, in the form of direct taxes, is also passed on to them at the end of the day.

Pakistan’s taxation policy concentrates on products in high demand. Kitchen and food items remain its favourite targets. Sugar, oil, wheat and gas also fall in this category, besides small cars. At the end of the day, when a government announces that it has met its revenue targets, it forgets about the people whose purses have been emptied in the process.

A major chunk of the budget is spent on the non-development sector. Health and education have caught least attention of the successive governments. On the other hand inefficiency of bureaucracy has prevented utilisation of 50 percent of funds allocated for the uplift projects this fiscal year.

Feudals, financial wizards and traders have been among the largest beneficiaries of the government’s reform drive. Mafias and cartels have emerged on the scene that control supplies and set prices of essential commodities at will. Privatisation and de-regulation of the economy have also affected middle and lower income groups of society due to massive lay-offs.

Confining interest rates to a single digit till last year affected small savers, while no significant progress has been seen regarding revival of sick units and establishment of ‘export-oriented’ industry in Pakistan by the private sector. While the government has a policy of not intervening in the market, the profits of businesses are touching new heights.

For last few years, the government has been procrastinating on the implementation of the wage board award, which would fix the minimum wage at $50. The privatization and deregulation drive has also cast a gloomy shadow on the poor, for it has not been accompanied by freeing of regional trade and increased spending in the development sector.

The imposition of 10 percent import duty on wheat, on the pretext of keeping the price of the commodity at par with the international market, has pushed the prices of the commodity up to $6.10 per 40 kg. The same reason has been forwarded in the case of oil and sugar prices.

High general sales taxes (GST) on essential commodities, low wages, no social security umbrella and unwillingness on the part of high income groups to slash their profits and pay their due taxes – all these are bound to frustrate the masses. This unrest among the masses can be easily exploited by the opposition political parties who are as enthusiastic about the upcoming elections as the ruling group is.

The looming water crisis but little preparedness to meet the challenge is another worrying concern of the polity, as it will not only devour the agro-sector but also aggravate the already sore relations among the federating units, particularly Punjab and Sindh. Being forced to use fuel to pump out the subsoil water and purchase fertiliser at international rates has already marginalised small landholders.

Bahawalpur – the cotton and livestock producing division of Punjab – is facing problems of its own kind. The continuous use of aquifers has not only reduced per acre yield, but also drastically pushed down the underground water. Thus the loss is double-edged, it means both health and wealth of the people.

The worrisome aspect of the whole scenario is that there are no alternatives available to the people. They are forced to buy substandard products in the absence of free regional trade. High prices of essential goods have not pushed up their wages. If the present government has failed to deliver, the opposition camp too is full of opportunists. No political party is serious about changing the people’s fate for the better. They just want to have their turn to rule the masses. Instead of promising any relief, they are inciting them on violence.

The growing frustration among the masses due to their falling living standards but no relief from the government in terms of taxes and social security constitutes the real challenge the state is confronting at the onset of globalization. If the present situation continues, its problems will also multiply. Those who can change the course of history are bound by their petty interests and do not want to see beyond their noses.

One wonders if regime change can bring relief to the people. As long as the existing social structures remain intact, the feudals, Maliks and Pirs will occupy seats in the legislative bodies. No change of heart or mind is expected to happen soon on the part of the wealthy. The poor have actually nothing left to lose now, but their patience.

The state needs to change the system, failing to do which will put its survival at risk. How will it be done is a million-dollar question but nothing is impossible in the Land of the Pure. The basic point in the game of change is that parliament should exercise its powers, and the justice system is drastically overhauled – the corrupt that have not only evaded taxes but also looted the national wealth without any fear of reprisal should be dealt with an iron hand.

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