Financial fallouts

Each budget holds a few promises: it promises to give the masses some hope for financial betterment by way of people-friendly economic policies. Last year’s budget held just this sort of potential when it was announced that government employees would get quite a substantial raise — 50 percent to be exact. For many, this was an outrageous promise but it was a promise nonetheless and was, more or less, welcomed. However, the economic performance of the government has left much to be desired and it has now been announced by the Federal Board of Revenue (FBR) and the government’s economic managers that it is likely that a salary freeze will be adopted this year. The government hopes to reach a revenue target of Rs 1.952 trillion in the current year. It looks like the upcoming budget holds the promise of further disappointing the people.

Chairperson of the National Assembly’s Standing Committee, Fauzia Wahab, has explicitly said that without any increase in the government’s income, any salary hike is wishful thinking. She said that the RGST would be of immense help in increasing the government’s revenue. Proposals to raise revenue include widening the tax net — a move it is hoped will be implemented as too many rich and well-connected folk get away with paying no taxes whatsoever — and plugging the leakages in the Afghan transit trade. For this, it was suggested by the MQM that the National Logistics Cell be replaced by Pakistan Railways. This is a farsighted proposal because, although it is not sure how much smuggling it will stem, the move will definitely serve to address the flagging revenues of the Pakistan Railways, which is in severe financial straits. Cargo is a mainstay of railway networks around the entire world. Why should Pakistan Railways not benefit from this global practice? It has the added advantage of taking the heavy load and concomitant wear and tear off the highways.

The price hike, inflation, hike in electricity tariff (when there is hardly any electricity available) and the rising costs of fuel and transportation have made the lives of the people intolerable. The fact that salaries are being frozen will add to the misery. All that can be hoped is that the suggestions being given to the National Assembly on how to raise revenue, which include bringing a substantial number of tax evaders into the tax net and advantaging Pakistan Railways with trade will be implemented. As far as the RGST goes, it remains to be seen whether the so far elusive consensus can be achieved. – Dailymailnews