NFC Award

Modern states, for sure, are presumed to conduct their business by following well-established traditions, rules and clearly defined timelines. Since the advent of 2020, however, Pakistan has also been dealing with a panic-stirring pandemic like the rest of the world. It demands total attention of our rulers.

In these extra-ordinary times, the Imran government should have seriously considered disregarding the custom of presenting the next financial year’s budget, in the month of June, come what may.

Only the other day, none other than Prime Minister Imran Khan himself had forewarned the public that COVID-19 remained an ongoing menace. It continues climbing to the peak with a speed and pattern, the intensity of which we could yet not grasp. Perhaps we have to wait until the end of July or early August to correctly gauge the impact of it.

As if the Corona-driven gloom was not enough to baffle all of us, strong signals are also bleeping red to prepare us for a massive attack of locusts by the end of ongoing month. Locust had historically been coming to our lands via Iran after starting their travel from Africa. Doubly frightening, this time, is the news that the swarms of this crop-gulping killer had also discovered a new corridor for reaching Pakistan via Afghanistan. Then we also have predictions for above average rains in the coming
We could plan for the future only after accurate quantification of the accumulated losses to be caused not by the pandemic only, but also by a possibly deadly attack of locusts and unusual rains. Allocating amounts for each ministry and government-run department, many weeks before reaching “there,” looked somewhat audacious to my confused mind.

Listening to an hour-long speech of Hammad Azher on budgetary proposals, originally designed by IMF-gifted Hafeez Sheikh and his technocrat aides Friday, I kept wondering: “Fine. But where is the beef?”

The initial parts of his speech were unnecessarily devoted to remind the nation for another time that the PTI government had found the public kitty, almost bankrupt after taking over in August 2018.The previous governments of “looters and plunderers” had ruined all forums of governance. The Imran government was forced to embark on an arduous journey of course correction. Doing this, the minister conveniently disregarded the reality that he was presenting not the first but the second budget of his government. It was time to flag some gains, if there were any.

He did struggle to count some, but primarily focused on building the story that the strategy adopted to improve economy through previous year’s budget had surely begun to deliver. But then came the deluge, i.e., COVID-19.

The number-strong opposition made desperate attempts to subvert the flow of Hammad Azher by ceaseless heckling and desk thumping. They also smuggled in a big number of placards and banners to flaunt during his speech. It was a wasted effort.

The public can only watch the national assembly proceedings through officially controlled live stream in Corona-ridden days. The press gallery remains half-deserted for observing fundamentals of social distance and journalists are forbidden to record happenings on the house floor by their phones. The PTV cameras seldom go for long shots. They also hesitate to pan for capturing or showing the rowdy scenes. The hi-tech tools of sound control muffle undesired shouts. Yet, the opposition members kept straining their lungs with desperate hope of being mentioned in dispatches.

As an economic illiterate, I am in no position to fathom and interpret the load of figures, the minister continued to juggle for projecting the story that the Imran government was not feeling overwhelmed with crises. It was all-set to confront the daunting-looking challenges with a very brave heart.

He kept spinning a reassuring message by repeatedly highlighting initiatives the government had designed to alleviate the pain of low-income groups. He also promised packages to ensure survival of the small and medium scale industries and businesses.

At the same time, he was quite confident in claiming that by the end of next fiscal year, the government would manage a 24 per cent increase in tax collection. It sounds like an audacious claim, if you consider the reality that the government had already lost a huge amount of Rs. 900 billion from the accumulated target of revenues set for the previous financial year. After reporting negative growth, -04%, he also expected a positive rate of growth for the coming year, somewhere from two to two and a half percent, which did not appear feasible.

For the first time in Pakistan’s history, we have witnessed a negative growth rate. Previously, it had happened in the financial year of 1951-2. The dire financial straits of that year had forced us to eagerly join the so-called “free world” to wage the cold war against the Communist Camp with zealous vigor. The rest, as they say, is history.

The minister also admitted that the rate of inflation could stay put at around 8 per cent during the next fiscal. The decision of no increase in salaries, at least for the low cadre government employees, looks cruel in the given context. It is bound to burn thousands of hearts.

Hammad Azher kept using the expression of “no new taxes”, throughout his speech, like a catch phrase of a commercial message. Doing this, he behaved oblivious to the reality that through the previous year’s budget, a tax regime was introduced in Pakistan that IMF had dictated before committing a gradual provision of 6 billion dollars until September 2022. Most people in Pakistan strongly felt that the said regime was “anti-growth.” It was rather keeping our economy on a slow track to recovery. I simply fail to imagine how Pakistan would cope with Corona-enhanced gloom, while sticking to an arrangement negotiated many months before the advent of COVID-19.

The minister was not very candid when it came to the division of money between Federal and the Provincial Governments. The National Finance Commission settles the terms for this division. Of late, the Imran government had begun loudly complaining against the previously settled terms in this regard. Hammad Azher preferred to smartly circumvent the issue during his one-hour speech. But he did suggest “review” of the NFC Award. This clearly indicated the surfacing of potentially explosive tensions and conflicts on our political scene.

The PPP-led government in Sindh and the federal government certainly did not seem to be on the same page, when it came to managing COVID-19. The “review” of the NFC Award is bound to deepen the divide further.