Analyzing Pakistan’s Budget
By Naveed Khan
CA
Pakistan’s finance minister presented the 2009-2010 budget in the National Assembly and I would like the readers of Pakistan Link to pay attention to its provisions as it speaks volumes of where the government priorities are and how constrained are its resources.
For the sake of simplicity, I have expressed these figures in US $ terms using Rs.80 to 1US $ exchange rate.
It is the first time in Pakistan’s 62-year history that a woman presented the federal government budget and that also in an Assembly presided by a woman speaker. PPP government has certainly made huge strides in empowering women with practical and tangible showings.
Overall, except for the allocation for education and healthcare it is a progressive budget with lot of provisions to help the poor population.
Total Federal government budget outlay is $31 billion out of which the government will collect $16.5 billion from internal taxes and tariffs and borrow $9 billion and depend on aid, grants etc for the balance $5.5 billion. It is an untenable financial picture from the outset where borrowing constitutes 30% of the budget allocation and sources for 48% of the budget is unclear. About $9 billion is allocated for debt servicing and $4.2 billion for Defense expenditure, $8 billion for provincial governments and $7 billion for development projects and the rest. If unable to raise the requisite funds, as in previous budgets, the development projects are abandoned and it causes a continuous deterioration in the country's economic situation.
The total federal government spending on Education, Health Care, and Sports will be less than $800 million representing 2.5% of the budget. Granted that health care and education are provincial and local government issues, it is indeed astonishing that as the over all budget has increased by 28%, spending on human development has declined. Now contrast this to the budget for the President and Prima Minister Secretariat: it has gone up by substantial amounts.
The budget reflects the priorities for the government. All in all, it is clear that the PPP government’s priority is the welfare of the people and it is very well reflected in the allocations with the enormous financial constraints. I am afraid the government has presented the budget without securing the funds and it has cut many projects. It should be demanded that the government shows the source of funds and assures people that approximately $14.5 billion would be available. Even in the follow-up conferences Financial Adviser Mr. Shauket Tareen did not address this issue.
