Misreporting of numbers

One could almost forgive Finance Minister Ishaq Dar to want the country’s fiscal performance to improve. From imposing withholding tax on banking transactions to increasing tax on real estate, Dar has done it all during the last four years. However, when reports claim that the government has also been misreporting numbers, one needs to take a back seat and question the motives.

Is looking good in the eyes of the public and global lenders so important that one should resort to number-fudging? Apparently, yes. There is a reason why, despite the state of the economy, the rupee has remained at its level in recent years. Amid a widening trade and current account deficits, Pakistan continues to show off its strong rupee. One could argue that Pakistan is importing heavy machinery these days and a strong currency makes for a good case. But what about booking one amount twice to understate the budget deficit? According to a recent report, the government booked an amount of Rs64 billion in its 2016-17 accounts as ‘non-tax revenue’ after it had already included the same figure two years ago as well. All this occurred with small accounting tricks and the power of the ministry at your disposal.

When will the government learn that such tactics only remain hidden for a short while. Sooner or later, these tricks come to surface and expose the level of misreporting executed by the government. There is a reason why there is a lack of trust in Pakistan and there is a reason why investors look at our neighbours more. Despite claims of making the country an attractive destination, Pakistan continues to disappoint with stories cropping up every now and then that convey the mid to high level unreliability of the country. Pakistan’s economy may have made some progress, but most of it came on the back of falling oil prices. The growth, with no structural issues addressed, is not sustainable and it is beginning to show.

Published in The Express Tribune, July 19^th, 2017.

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