IF there was any doubt that we are about to see a populist budget at the end of the week, the development programme announced by the government ought to dispel it. The development budget for next year has been hiked by almost 20pc, going beyond Rs1tr. We will know the details after the budget, but for now it seems the government is prioritising discretionary expenditure as far as possible with an eye on the elections. Some of the schemes announced smack clearly of election-year gimmickry. Take, for instance, the programmes titled ‘Electricity to All’ and ‘Clean Drinking Water for All’ which have received Rs12.5bn each. It is obvious that providing electricity to underserved areas and clean drinking water to urban areas will cost far more than this amount, and require far-reaching legislative changes as well as reforms to reduce power theft and unregulated groundwater extraction. Yet we are unlikely to see any changes in those areas. Instead, all the government now appears to be aiming for, in the final fiscal year of its term, is quick and cosmetic changes designed more to capture votes than deliver lasting results to the populace.

We are also putting all our eggs in the CPEC basket, which is seeing further allocations of Rs180bn in its portfolio. We will know more about the details in this area when the final Public Sector Development Programme is released closer to the budget date, but it is clear for now that the expenditures focus on more roads than anything else. Again, the priorities of election-year spending shine through clearly. CPEC is a fixed point in the government’s agenda, but all else is being dictated by politics. It is unclear where the Rs400bn increase in development spending by bodies like WAPDA and NTDC will come from, and one can only hope that this will not be borne by power consumers.

The biggest question about the development programme is whether the revenues required for its implementation will be available. One will have to follow the budget closely to see if there is a corresponding increase in revenue measures to help carry the cost of this increase in development spending. Thus far, the government has had tremendous difficulty in broadening the tax net to pay for its ambitious and expensive development plans. This has resulted in existing taxpayers being squeezed harder and harder to carry the incremental fiscal burden. Being an election-year budget, and given the development plan already announced, it seems this year will see the same trend.

Published in Dawn, May 22nd, 2017