A nation’s budget is an amalgamation of bureaucratic forecast, trade and industry’s aspirations, and politicians’ populist giveaways. The ramification of each budget is felt immediately even though many measures are primarily meant to bring long-term stability or consistency in the economics of a country. In the past, the presentation of a budget by the Finance Minister was a long tedious process where the whole document was read from the first page to the last line. People knew instantly what they would be getting or paying.
Today, the budget presentation has become a chest-thumping and yahoo-shouting dramatics where the after-effects of the budget are not known until experts try to decipher the whole document. The Opposition benches in the National Assembly deride the budget from the word go, while the Treasury members listen less to the oratory of the Finance Minister and concentrate more towards the first row, waiting for the Prime Minister to thump the desk so that they too can join in the chorus.
Budget 2006 was presented by the lean and lanky junior Minister in a manner reminiscent of Agha Hashar Kashmiri’s stage plays when theaters did not have the luxury of a sound system. The braggadocio displayed by him literally turned off the listeners, including millions watching the mini-screen all over the country and even outside Pakistan. The merits of the budget got side-stepped by the “hum sa koi ho toh samnay aai” juvenile challenge.
Glancing thru the morning papers, watching the business programs on various private TV channels, and talking in private gatherings of businessmen, the general feeling one got was that this was probably the first time where the business community openly criticized the budget. The embedded sycophancy was missing; skepticism reigned supreme; dejection was written all over their faces.
The budget was heavily skewed towards the agriculture regime and towards micro-management of the basic necessities of the citizens, especially the hot burning issues of pulses, sugar, and the minimum wage. The Field Marshall’s progeny even announced the retail prices of a few pulses that reminded one of the 1960’s when Radio Pakistan would announce the Empress Market wholesale rates every evening. The minimum wage was increased by one grand, a reasonable and much-needed action, but then the working hours were surprisingly now being defined by this document.
The budget was also very favorable for the importers as it opened up more loopholes, gave them a lot more incentives, and put Pakistan on the avenue of becoming a prime import-dependant country rather than a developing industrial power. In the long run, the importers would definitely rule supreme in the country. The triple menace of smuggling, under-invoicing, and mis-declaration would get more impetus and it would not bode well for the various national industries. These are dangerous signals, for sure.
However, what was most amazing and shocking was the blatant disregard of the textile industry, the top most priority industry of Pakistan, in this budget. Not a word on textiles was mentioned. The hue and cry raised by the textile industry immediately after the budget presentation compelled the finance managers to come out with a damage control statement that a separate incentives package for the textile industry is on the anvil and would be announced shortly. This knee-jerk reaction did soothe the wounds of a few, but the response within the textile community was very cynical. If there is a textile-package in the embryo stage, there should have been some inkling thru the budget.
The doomsday scenario for the textile knitwear, garments, and hosiery is over-bearing. Dark clouds are hovering over the landscape. These sectors need a level playing field vis-à-vis their regional competitors who have a 20% edge over the Pakistani companies. Bangladesh has made a big dent in Pakistan’s knitwear industry siphoning off a huge chunk of export orders because of a formidable price disparity due to government subsidies and EU’s GSP Plus benefits. Bangladesh and India are racing against time to become Goliaths in the towel and bedwear sectors that are at present Pakistan’s niche products. Their governments are bending backwards to provide fiscal, moral, and logistics support to them. Pakistani textile manufacturers and exporters have cried themselves hoarse trying to convince the government to be pro-active and understanding. Time is very short; if textile industry is not propped up, then within two years 60% or more of knitwear, garments, and hosiery would cease functioning resulting in a massive upsurge in the unemployment figures.
Although agriculture sector has been provided a lot of support thru various measures, the downside is that traditionally the agriculture sector does not fully take advantage of these measures to progress in leaps and bounds. On the other hand, the industrial sector derives maximum benefits from the incentives offered. This dilemma is very disturbing and is the root cause for the one-year-glut, one-year-shortage scenario in many of the nation’s crops. It is high time the agriculture sector is institutionalized, is modernized, and is productive. The feudal mind-set has to change otherwise the vision of the white revolution, the dream of exportable surplus in food crops, and the determination to maintain affordable prices of commodities would not materialize.
The Federal Budget 2006 should have been more imaginative rather than being imaginary. It was the output of some of the brightest minds in the government today. During the pre-budget briefings and seminars, it was propagated by the spin doctors that the 2006 budget would take the country on the motorway of prosperity. It seems that this has lots of potholes, plethora of encroachments, and frequent detours and diversions. It is the fervent hope of those that want to live in an economically viable country that this road would be repaired, paved, and rehabilitated in a fast-track mode so that, truly, the 160 million citizens can zoom away on the motorway in top gear. As Faiz Ahmed Faiz so brilliantly proclaimed:
Jo is sahat mein pinah hai ujala hum bhi dekhayn gay
Jo farq-e-subah per chamkay ga tara hum bhi dekhayn gay
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jUNE 09-2006
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