Falling short of targets

Burdened with debt and driven to the doors of donors, Pakistan has not looked towards its own public to raise revenue

Barring our rulers, all believe that Pakistan will miss its budget deficit, growth and tax-collection targets this year. Even the country’s finance minister isn’t too upbeat as he runs from pillar to post, making attempts to raise money through bonds, loans and grants. The debt-driven growth model has failed to bear fruit and the latest publication that paints Pakistan’s prospects as gloomy follows the same tone. In its flagship publication, the Asian Development Outlook 2015, the Asian Development Bank (ADB) has projected Pakistan’s growth to edge up to 4.5 per cent, which is a whole percentage point lower than the target the government has set for itself. Amid declining oil prices, inflation is projected to remain low, which should help importers of petroleum products, but tax revenue is also likely to take a hit and that is a worrying sign.



Time and again, international lenders have called for reforms to Pakistan’s tax machinery. Burdened with debt and driven to the doors of donors and lenders amid rising defence spending, Pakistan has not looked towards its own public to raise revenue. Instead, it keeps looking for the easy way out, repeatedly asking global lenders for help. Falling tax collection has not only forced the government to increase indirect taxation, but has also led to the country missing growth and budget deficit targets. If the performance of the first two months of the current fiscal year is any judge, collecting an ambitious Rs3.104 trillion seems like a tall order. Refunding claims will only make things worse for the Federal Board of Revenue.

Another crucial point the ADB raised — that mostly gets ignored in this part of the world — was gender disparity in the workplace. In a special themed chapter, the ADB has noted that while Asia’s economic boom may have helped women in many ways, their labour force participation has gone down in the last 23 years. It also highlighted the hypocrisy where countries want increased female participation in the workforce, but little is done to remove obstacles for women, such as hindrances to reach senior positions and the pay-gap. Pakistan is not exactly known for promoting women in the workplace. Cultural barriers, artificially erected to protect male egos, have got in the way. These are some serious worries for our rulers who do not miss any opportunity to boast of its Malalas.

Published in The Express Tribune, September 29^th, 2015.

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