KARACHI: Pakistan Tehreek -e-Insaaf (PTI) governmentfrom its day 1 in the office is facing an almost empty national kitty. The depleted treasury was a planned one by the outgoing Pakistan Muslim League (Nawaz) to fail the new government or was a national disaster made due to wrong policies of now fugitive former federal minister Ishaq Dar is yet to be determined.
However, the fact remains that revamping the national economy remained an uphill task for the PTI’s government since its inception and continues to be so till date despite untiring efforts by economic manager Asad Umar.
The first challenge PTI’s government faced was meeting the salary bill of the federal government employees and latest is devaluation of rupee which has increased Pakistan’s debt to a burgeoning unmanageable proportion.
PTI’s chief Imran Khan in his speeches at public meeting has vowed to break the begging bowl, opposed loans from International Monetary Fund (IMF) and said he would prefer starvation over seeking loans.
The weakening economy due to a volatile Pakistan Stock Exchange (PSX), rupee devalution, decreasing confidence of foreign investors and flight of capital from the country forced the Imran led PTI government to approach IMF for a bail out pacakage.
In somewhat of a ritual, Pakistan was once again back at the doorsteps of international creditors like it went to the IMF after every election 2008, 2013 and now 2018. This time the request for financial assistance is expected to be the largest ever matching a huge trade deficit.
The ever increasing circular debt was another recurring night mare for the managers of the economy.
The advantages given to the IPP’s (Independent Power Producers) by the previous government of PPP and PML-N, the increased dependence on imported LNG and lately RLNG in view of depleting natural gas reserves, the faulty policy for import of furnace oil also added to the economic turmoil.
The tax collection by FBR also suffered as PTI government attempted to cut down the huge import bill particularly of costly un-necessary items classic example of which is “ cheese “ . The shrunken tax purse also hurt the new government which has planned for a big success to win more support for PTI.
IMF met the request by Pakistan with a stone cold “ delay “ to dictate more strict terms, the acceptance of which would mean a political suicide or in less unfavourable response, losing public support.
PTI in view of luke warm response from IMF found another way out and requested China, its most trusted friend and CPEC partner for a bailout package followed by similar request to Kingdom of Saudi Arabia (KSA) and United Arab Emirates (UAE).
The response was more re-assuring and relieved the new inexperienced rulers which visibly had a breather, ample time to re-direct the economic policies, to overcome huge trade imbalance and to develop the economy on the basis of exact value of rupee.
The strengthened economy has re-infused confidence in federal finance minister who recently in a meeting with businessmen of Karachi has announced to unveil second mini budget on Jan 23.
His recipe for economic correction include more taxes on imports, no tax within and incentives for stock exchange and exporters.
Taxing the agriculture, the biggest business again escapes tax imposition. The entire nation has started a countdown for Jan 23 hoping “ good news “ as assured by Finance Minister Asad Umer.
PML-N and PPP, the two major opposition parties have already started scathing criticism regarding mini budget but the nation understands well that “ extra-ordinary steps are needed in extra-ordinary situations “ and there exists an extra ordinary situation as national economy needs an overhaul.