This Budget is made not by a Federal Govt, says Sherry
Islamabad, June 7, 2016: Speaking in the Senate today, Vice President PPPP Senator Sherry Rehman rejected the budget presented by the Finance Minister last week, saying it was made by the government of one province and from another century.
“The federal budget is normally a vision statement that lays out development priorities for the entire federation, but this one is an accounting exercise which fudges figures and misuses the Finance Bill to subvert the spirit of the 18th Amendment and the National Finance Award,” stated the Senator on the floor of the House.
“This government has not only used the budget and its powers to undermine the historic social contract instituted between the federation and the provinces in the PPP government, but is also actually insidious in its attempts to erode the will of the Constitution and the decisions of the NFC award by trying to remove the power of the provinces to collect sales tax in the service sector via a clause in the Finance Bill,” she elaborated.
Rahman said that this would impact Sindh, which had raised Rs 49 billion this year in taxes, and was way ahead of others in registering enhanced tax receipts by 29 percent and transparency via digital documentation protocols.
This is how budgets were made in the 1990s, not the devolved Pakistan.
“The federal government is not only delaying transfers from the federal divisible pool regularly and deliberately, but also forcing the provinces to show surplus budgets by 13 percent in their accounting exercise so they are less eligible for funds,” she added.
“Their pointed slow-down of federal transfers, low development outlays, and attempts to cut tax powers of the province amounts to a violation of the spirit of the NFC award, which has been inexplicably delayed by over three years,” declared Rehman.
“This is how budgets were made in the 1990s, not the devolved Pakistan. If the federal government wants to revert to the budgets of another century, then they will lose their mandate to govern the federation. The dangers of such an approach are obviously lost on a leadership that has ignored contemporary Pakistan’s needs,” she said.
Rehman also lambasted the government for ignoring the one-third of Pakistan that was now officially under the poverty line, saying that it was the PPP government that designed and implemented all structural reform such as the largest social transfer of public wealth to the poor in the form of the BISP.
There is no credible answer for why the accumulated total debt stock of the country has risen to a staggering amount of Rs 19.4 trillion
“Nor has this government done anything to increase the tax base, as it has overseen a reversal of history and progress here too by reducing the number of people who actually pay tax in Pakistan to slip under a million persons. This is actually deeply troubling for an increasingly indebted economy, where instead of generating resources by expanding the tax base, this government has lowered this base by its focus on regressive and indirect taxes that only burden the already taxed and the poor,” she said.
On forex reserves and debt, Rehman said that the foreign exchange stabilization the government likes to boast about is on the back of global oil price lows and overseas worker remittances, adding, “Whereas there is no credible answer for why the accumulated total debt stock of the country has risen to a staggering amount of Rs 19.4 trillion, with mounting external debt, killing all attempts at real sovereignty or real growth.”
“By borrowing at junk rates on foreign capital markets this government has indebted every Pakistani to a future of Rs 100,000 debt. This is their economic miracle,” maintained the Senator.
“What answer does this government have for campaigning on eliminating loadshedding in the country, when instead of increasing electricity production and reforming transmission it has actually presided over a shocking downturn in installed capacity from 23,212 MW to 23, 201 MW in this fiscal year?” she questioned.
Which Pakistan is it budgeting for when neither the National Action Plan gets any funds that NACTA asked for, slashing budget by 90 per cent of its ask?
“Which Pakistan is it budgeting for when neither the National Action Plan gets any funds that NACTA asked for, slashing budget by 90 per cent of its ask? How does this government think rapid deployment will happen for civilian law enforcement or institutional coordination on countering terrorism and violent extremism? Is this too to be outsourced like foreign policy to an already frustrated military which is also supposed to protect against the unraveling of the CPEC which the PPP had worked so hard to make happen?” she inquired further.
“There is no focus on climate change or water harvesting, when Pakistan is showing regular signs of dangerous water insecurity and climate stress, while the agriculture sector shows worrying declines. There was no leadership from Pakistan at global summits on climate and carbon bargaining, and this budget shows us why. This budget was made for another century, and likely for another Pakistan, where high-commission highways and trains are privileged over water, shelter, jobs and security,” concluded Rehman.