Corporate Pakistan that has both the capacity and capability to boost investment to lift all boats did not find the current budget exciting enough to push them into action.

They considered it yet another routine annual ritual bereft of measures that address key concerns of serious investors.

In his speech Finance Minister Ishaq Dar targeted to increase the investment by over 2pc to 17.7pc of GDP and to push fixed investment up by 16.1pc in 2016-17.

The budget document declares that investment under CPEC is expected to improve the investment climate. Improvement in energy availability, easy access to finance and reduced political and economic uncertainty will help attain the target.

The businessmen reached over the phone expressed disillusionment with the ruling party. “We assumed they will be more mindful of our demands to contain cost of production and improve the ease of doing business in this difficult environment marred by dumping by informal producers and importers. But by scanning steps announced in their fourth budget, it is clear that they do not wish to tinker with the flawed tax framework to make it efficient and equitable,” commented a business tycoon.

According to the Pakistan Economic Survey 2015-16, launched a day before the budget, investment-to-GDP ratio reached 15.2pc during 2015-16 with a total investment of Rs4,502bn as compared to Rs4,256bn a year before, showing a growth of 5.7pc. It would be pertinent to note that the average investment as percentage of GDP in emerging economies is 31pc, in India it is 36pc, Bangladesh 32pc and in China 47pc.

A business leader projected that in 2017 Pakistan may actually slip further down in ranking on the global index that places countries on the basis of ease of doing business. In 2016 survey Pakistan was ranked 138 out of 189 nations assessed on ease of doing business criteria.

The Overseas Investors Chamber of Commerce and Industry (OICCI) comments on the prospects thus: “There were no details shared of the government’s plan to improve governance, bring the informal sector in the tax net, reduce the burden of the existing taxpayers, reform the taxation system, document the economy, broaden the tax base and improve Pakistan’s rating in the Ease of Doing Business Index”.

Many top executives and representative bodies in initial reaction acknowledged measures announced by Finance Minister Ishaq Dar to prop up agriculture and exports as being positive but expressed doubt on their quality and potential to turn the two sagging sectors around.

An excerpt from mailed reaction of Pakistan Business Council is reproduced here: “The budget speech made no reference to need for FBR’s structural reforms, simplification of the tax code, removal of tax officials’ discretionary powers, or plans to institute risk based, third-party audits. With large taxpayers continuously subject to harassment through multiple audits, it is not surprising that those outside the tax net prefer to stay out and pay higher withholding taxes.”

“With ‘Panama Papers’ in everyone’s mind, the finance minister could have taken bold steps to bring domestic ‘Panamas’ into the tax net, benefiting from lessons from the failed scheme for traders mooted earlier.

“Disappointingly also there were no proposals to bolster competitiveness of domestic industry impacted by influx of zero-tariff imports from poorly negotiated free trade agreements, smuggling, under-invoicing and the misuse of the Afghanistan transit treaty”, it added.

In an emailed response the Institute of Policy Research commented: “The impact of measures to revive growth in agriculture and industry may be temporary.

“The need was for a long-term effort to build competitiveness and increase productivity. While reduction in input cost will help, agriculture suffers from neglect of water resources and mismanagement. The budget proposals do not address the real issue of improving seeds and restricting virus. The government cites volatile prices as the reason for decline in production. However, most agriculture indices show a downward trend. Next fiscal year’s PSDP provides Rs31.7bn for the water sector that is Rs15bn less than the outgoing fiscal year”.

It adds: “The budget also provides fiscal incentives for industry when it needs technology support, access to capital and structural reforms to reduce costs. It does not include proposals to improve governance to reduce the cost of doing business and to develop the capital market as a genuine source of funds”.

The OICCI did appreciate the extension of benefits until June 2019 for investment under balancing, modernisation and replacement (BMR) and also reduction in the equity component to 70pc on new investment. It laments lack of any out-of-the-box initiative to attract new large foreign direct investment and extension of 3-4pc super tax for another year that it believes will increase the tax burden on corporates to 34-35pc despite 1pc reduction in the corporate tax to 31pc.

“Moreover, we understand that input sales tax on services paid to the provinces will no longer be allowed to be adjusted against federal taxes. This will have a huge negative impact on cost of doing business”, it said.

Published in Dawn, Business & Finance weekly, June 6th, 2016