The government, while playing a balancing act between saving the state and playing politics, unveiled an 'election budget' on Friday, with a calculated move to regain public favour and not giving much thought to how the International Monetary Fund (IMF) would react to it.
With Prime Minister Shehbaz Sharif in attendance and without an effective opposition in the National Assembly, Finance Minister Ishaq Dar -- while basking in the glory of averting a looming default -- presented the budget.
He described it as “not an election budget” as it focused on the “elements of the real economy”.
With foreign reserves depleting and the IMF programme in doldrums, the finance czar started his budget speech by recalling the PML-N’s achievements of the past, saying the economy was stable, inflation was under control and GDP growth was above 6% when ex-premier Nawaz Sharif was in power.
Although he admitted that the country was currently facing its worst economic situation, Dar conveniently pinned the blame on the PTI, which was not in parliament to defend itself as it had abandoned the National Assembly right after its chief Imran Khan was ousted from the post of the prime minister through a vote of no-confidence in April last year.
A handful of disgruntled PTI leaders, who were present in parliament, had no option but to listen patiently.
As opposed to previous budget sessions, there was hardly any noise when the finance minister presented the document in the lower house of parliament. During earlier similar sessions, the opposition parties would not even allow the government to smoothly present the budget.
Throughout Dar’s speech, opposition leader Raja Riaz kept his head buried in the sand -- reading budget books.
In his speech, Dar took credit for saving the country from default, saying the government tried to restore the IMF programme despite knowing that several steps would put a burden on people, yet it preferred the state over politics -- resultantly losing popularity and burning most of its political capital in the last one year.
As the 2023 elections loom, the budget has become a strategic move to rekindle public favour.
The importance of presenting the budget can be gauged from the fact that during the government and PTI talks, which ended at a stalemate a few weeks ago, the latter had asked the incumbent rulers to immediately dissolve the assemblies and not present the document.
Sensing that it could win back public support just before the 2023 elections, the government had turned down the proposal.
Read PM Shehbaz addresses cabinet before budget reveal
Now, with the aim to rebuild its political capital before the 2023 elections, the government has given relief to people in different sectors, raised pay as well as pensions of government employees, increased the defence budget, extended concessions to the information technology industry, and allocated Rs90 billion development budget for the parliamentarians for the next year, among other steps.
Although the finance czar said it was not an ‘election budget', the government has reduced tax liability by 50% for youth under 30 years of age, given a 10% respite in tax liability of Rs5 million to the real estate sector, proposed five-year tax holiday for the agro-based industry, and abolished 2% tax for overseas Pakistanis if they purchased immovable property -- in the hope that that the moves would help it build its depleting political reserves before the general elections.
Reducing the prices of petroleum products just before presenting the budget was another step to lower public outrage in the election year.
Giving a raise of 35% to grade-1 to grade-16 and 30% to grade-17 to grade-22 government employees is also being seen as an attempt to appease them as they continued to protest against the rulers outside parliament when the budget was being presented.
All the roads leading to parliament, except one, were closed for vehicular traffic because of the protest on the budget day.
Right after coming into power in April 2022, the government had started losing its political capital after it raised the prices of petroleum products, allowed massive depreciation of rupee and failed to control the spiralling inflation among other issues.
No matter how many times the government denies that it is not an ‘election budget', it was witnessed time and again throughout the previous fiscal year that the ruling alliance was unanimous that it will have to provide economic relief to the masses to mould public opinion back in its favour before the next polls.
Although the May 9 violence, triggered by the PTI chief’s arrest, has hugely damaged the party's fortunes, the government knows that only economic relief can help it rebuild the political capital, which it burned by making some ‘tough decisions’ in the last one year.
With almost no opposition in the National Assembly, the budget is expected to sail through parliament, rekindling the government’s hope that it would somehow evaporate public anger and yield positive results in the upcoming polls.
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