FINANCE Minister Ishaq Dar often changes goalposts while talking to different audiences. This raises a question mark over institutional transparency and integrity.

On June 2, the finance minister, while launching the economic survey, claimed victory for achieving 4.14pc real GDP growth rate for fiscal year 2013-14 — the highest in six years. The next day, he shared the same jubilation with the parliament while presenting the federal budget, and has since then stuck with this position at home.

When pointed out that the GDP growth rate should have been 3.6pc as critical data on large-scale manufacturing for a month had been left out — which was otherwise available with the Pakistan Bureau of Statistics (PBS) — he became extra critical.

But on June 19, he reported a different picture to the IMF. “We now expect that GDP will expand by about 3.3pc in FY2013-14, while it should accelerate to around 4pc in the next fiscal year,” he wrote in his memorandum of economic and financial policies submitted to the IMF, now in full public domain.

The development expenditure which stood at 4.6pc of GDP in 2013 and also included both federal and provincial development plans, tumbled down drastically to 2.9pc of GDP in 2014

The minister has not explained how he could single-handed bring down the GDP growth rate from 4.14pc to 3.3pc in less than two weeks. This has put a question mark on the institutional integrity of the PBS and its governing body, which is led by Mr Dar himself.

The figure of 4.14pc was approved by the National Accounts Committee — drawn up from all the four provinces — obviously based on data finalised by the PBS. The committee has not met since it approved the magic number, and would perhaps meet ahead of next year’s budget to revise GDP growth rates based on actual data for FY2013-14.

And with one stroke of the pen, Mr Dar has cut back the current year’s growth forecast to 4pc of GDP from 5.1pc, which he had promised to parliament in his budget speech and attached documents. An over 1pc change in the economic growth rate in a few days in itself is a serious issue, and those involved in finalising these numbers at the Planning Commission of Pakistan and getting them approved from the National Economic Council are at a total loss.

Mr Dar also informed parliament and the people at home through his budget speech that the rate of inflation for FY2013-14 stood at 8.5pc. “Annual headline inflation is now forecast at 9.5pc by end-June 2014,” he wrote to the IMF on June 19, highlighting a drastic change in inflation numbers even though there was no major price shock in the country between June 2 and June 19.

Likewise, the inflation forecast for the current fiscal year had been set at 8pc in the budget, which has now been revised to 7.5pc, according to his letter to the IMF.

If the data shared with the IMF is to be relied upon (a more likely scenario), then most of the budgetary projections for the current fiscal year have lost much of their relevance even before the start of the fiscal year on July 1.

Similarly, the finance minister has used different principles to work out the budget deficit numbers for the last financial year and a year before that, i.e. 2012-13. For FY2012-13, Mr Dar had included more than Rs300bn of circular debt payments to ramp up the deficit of the PPP-cum-interim government to 8.2pc.

In fact, he had strongly criticised his predecessors for not showing real spending on circular debt. While finalising numbers for his first year in office, he, in the same way, excluded more than Rs300bn of circular debt that had reemerged, to show the fiscal deficit at 5.7pc of GDP.

The data shared with the IMF and kept in wraps at home has also shown some alarming indicators. For example, private sector savings — which also include those from public sector corporations — came down from 18.1pc of GDP in 2013 to 15.7pc in 2014. Gross savings, on the other hand, increased from 13.2pc of GDP in 2013 to 14pc in 2014, perhaps because of foreign grants, particularly the $1.5 billion Saudi gift.

The IMF-government joint data also depict a very unhappy situation. The development expenditure, which stood at 4.6pc of GDP in 2013 and included both federal and provincial development plans, tumbled down drastically to 2.9pc of GDP in 2014. This was quite expected, given the tight squeeze on federal development spending to contain the fiscal deficit within the given IMF range and a generous cash surplus provided by the provinces for fiscal consolidation.

The serious drag on the country’s development budget has long-term impact on the living standards of the people, and is always subject to cuts when other expenditures remain out of control. And despite tall claims about the austerity drive and no real increase in government expenses, the current expenditure increased from 16.3pc of GDP in 2013 to 16.9pc in 2014, according to documents published by the IMF last week.

Published in Dawn, Economic & Business, July 14th, 2014