Talking business

Do seven hundred thousand new taxpayers, assuming they even come, really add up to documentation of economy.

The best way to see this budget is as a metaphor.  A lone man straining to be heard in the middle of a roomful of people screaming like lunatics more or less sums up the state of economic management in this country.  It also perfectly describes the challenges awaiting the finance team in the year ahead.  What does the budget tell us about how the finance team intends to deal with these challenges?

Let’s start with the commotion.  When was the last time a budget speech was made in the midst of such pandemonium?  I remember June 2007, when Omar Ayub was assailed by catcalls throughout his speech.  But that moment came when the memories of May 12th were fresh in people’s minds.  What exactly did the N League have to get so uppity about this time round?

Leader of the opposition, Chaudhry Nisar tried to explain to reporters afterwards, but all he could muster was a general pique at the injustice of it all.  When asked why his party chose to shout at the budget speech, he cited every reason under the sun, from Raymond Davis to inflation, from corruption to loadshedding to green chilies not being quite as hot any more these days.

But amongst those who refused to participate in the lunacy, what was the sense of the budget?  Coalition partner MQM was going on the record the very following day saying they are not satisfied that the budget meets any of the challenges the country is facing, and they gladly made a long list of these challenges.

Chambers and business community leaders were quick to dismiss the “relief” measures announced in the budget, quick to dismiss the credibility of the revenue target, quick to announce that this budget does nothing whatsoever to get growth started again.

Economists noted that they cannot discern any thinking behind the budget.  It’s not a growth-oriented budget, not really a “relief for the common man” type of budget, nor a stabilisation budget for difficult times. The budget appears to reflect a clumsy attempt to tie together the disparate pressures faced by the finance ministry.

Documentation?  Yes, we have seven hundred new taxpayers about to be added to the net!  Deficit?  Yes, we have withdrawn zero rating from all these sectors, harmonised their rate at five per cent.  Inflation?  GST rate has been brought back to 16 per cent, Excise Duties being phased out, should relax the tax burden on prices across the board.

But place these measures next to the problems they are trying to speak to and you’ll get a sense of proportion.  Do seven hundred thousand new taxpayers, assuming they even come, really add up to documentation of the economy?  Of the sort that a value added tax is supposed to bring about by documenting the input and output prices of every taxpayer?  How much revenue is expected to be raised from the withdrawal of zero ratings on sales tax?  Enough to bridge the 364 billion rupee chasm the FBR is being asked to bridge in the next 12 months?  Nobody thinks so.

The budget is an ad hoc document, clumsily put together to appease disparate communities without much of an effort to extract a coherent narrative out of it all.  Expect to see no effort in days to come from the finance team to reach out to the public.  No effort to go on the talk show circuit, grant individual interviews, no effort to speak to the public directly.  And this is not because they are “too busy.”  It’s because they have nothing to say, no story to tell, no thinking to push, no line to spin, no position to debate.

And that’s what this budget reflects:  the emptiness of a politics of survival.  A janus- faced document that shows you whatever face you want to see, because it is hiding nothing, is built around nothing.  It’s not a symphony of words, or a cacophony of numbers, nothing quite so grand.  This budget is like elevator music, designed to whistle inanely  and long enough till you have no choice but to be on your way again.

The writer is Editor Business and Economic policy for Express News and Express 24/7

Published in The Express Tribune, June 6^th, 2011.