Budget 2019-20 & Speech of Imran Khan by Abdul Quayyum Khan Kundi

The most interesting comment I heard about the budget was from one of the opposition politicians. She said the budget document is really heavy for parliamentarians to carry so they understand its weight on the people. It was an elitist comment and clearly depicted how far removed our public representatives from the plight of the people. I am only interested in reviewing the budget at the macro level and leave the micro details to the accountants. At that level, the budget has to be viewed from qualitative and quantitative perspectives.

Qualitatively Imran Khan promised that he will not increase the burden of existing taxpayers; will expand the tax net; reduce debt burden; contain waste through corruption; ensure social justice; harmonize fiscal balance between center & provinces; create new job opportunities for youth, and achieve economic sovereignty through expanding trade and economic growth. Almost all of these objectives are missing from the budget. We will increase our debt because there will be a fiscal deficit that will increase our debt burden. Growth will slow because of the austerity drive that means fewer jobs available for youth that are entering the labor market. Conflict will increase between center and provinces because he expects them to contribute Rs. 400 billion through cutting their development expenditure. Corruption is still rampant in the country and only selective accountability is pursued to achieve political purposes. The burden of funding government will be carried by the current taxpayers and no serious attempts are obvious in the budget to expand the numbers of taxpayers.

Quantitatively the most striking numbers are additional revenue of almost Rs. 1.5 trillion. The middle class has to carry the increased burden to the tune of Rs. 60000 per annum resulting from reducing the income tax threshold as well as high inflation and indirect taxes on essentials. Who will pay the additional Rs. 1.5 billion in revenue? There is no clear answer to that and most projections are wishful thinking. Chairman FBR Shabbar Zaidi could have included in the budget that everyone that owns a car of 1300 cc is required to file a tax return. As well as a house owner and renter that pays Rs. 20,000 per month rent has to report their tax filing status in the rent agreement. Or that all commercial electricity connection holders have to be tax filers. No such measures were announced rather government is sending conflicting messages. On the one hand, they are threatening people to avail the asset declaration scheme or else face the iron hand of the law while at the same time sending a message that it is not really important to be a tax filer. Such contradictions are built into the budget by the blue-eyed finance minister that belong to the elite and has made the budget for the elite. None of the elites that includes senior army officers, oligarch, landed large farmers, and housing societies will be carrying any burdens of the economy and still expect to get incentives.

The increased burden of Rs. 60000 per annum on the middle class means that their disposable income will be less which will adversely impact savings. This will reduce banks ability to fund capital expansion which is important for growth. All this put together means the current budget is more of the same and juggling of the interests of the elite classes rather than provide a firm footing for the economic prosperity of the nation. I believe a significant number of people want to pay taxes but they are afraid that in an unjust society once they give government agencies access to their assets then there will be never-ending demands for compliance from it that costs time and money. Even then they can’t be sure they will be dealt justly. So they prefer to avoid it rather than come forward to participate in it.

Imran Khan speech was most interesting and confirmed that he has lost all access to power. He reduced himself to become a head of JIT that will replace Shahzad Akbar and Justice Javed Iqbal as the main platform to catch corruption. While he is busy chasing imaginary thieves the economy, foreign policy, security policy, and all other government departments will be run by the third umpire. The emergence of the powerless fictional PM is complete. I think opposition should help Imran Khan by suggesting his name for the head of PAC if he agrees to leave PM slot for a better-qualified person. I have never taken Imran Khan pledge to fight corruption seriously. Because if he meant it then he will start with his own house and their own BRT project which is completely infested with corruption and cost this nation Rs. 84 billion without delivering anything.

The current Republic serves interests of the elite at the cost of the majority of the nation. It has to be replaced by the second republic if we want economic prosperity for all.

thanks & regards

Abdul Quayyum Khan Kundi

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