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A difficult budget

The federal budget for the next financial year is to be presented today. The government leaders have been leaking not-so-happy bits of it. Having concluded an agreement with the International Monetary Fund for a 39-month Extended Fund Facility, the government is bound to come up with a fiscal plan that aims at meeting the IMF conditions for abolition of subsidies, raise in utility rates and more taxes. To prepare the public for bad news, Special Assistant to Prime Minister on Information Dr Firdous Ashiq Awan and the Special Assistant to Prime Minister on Accountability Shahzad Akbar told a press conference that the budget, characterized mainly by austerity, will bring a ‘slight’ relief to low-grade salaried workers.
The government is likely to introduce tough measures to recover losses in operations of electricity and gas utilities from the consumers. If the measures are not announced in the budget, they will come in ‘supplementary budgets’ revealed later. There is apparently no way around it. Otherwise the country will not be eligible for the $6 billion loan facility. The middle- and low-income households should brace themselves for a new wave of financial problems. They have already lost a part of their disposable income with the raises in energy prices and currency devaluation.
Is this opposition’s chance to launch an anti-government drive? Dr Awan has already warned against any attempt to disrupt the presentation of the budget, saying it would be dealt with an iron hand. It may be argued that instead of warning the opposition, she should have suggested to her colleagues in the government to provide some relief to the middle- and low-income classes, even at the cost of the affluent, who can better absorb the hardship. That is the only practical way to keep the masses from buying into the opposition argument. The government should consider abolishing tax exemptions and the special treatment of certain classes. The military leaders have shown the way by forgoing salary raises for senior officers.
The prime minister has meanwhile urged the people to benefit from the amnesty scheme, which expires on June 30. Those who have stashed money abroad might not take the prime minister’s warning seriously. The government should be prepared to launch the crackdown it has been promising.



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