From the way Finance Minister Hafeez Shaikh is talking these days, it seems like the budget is going to be just like the smile of the Mona Lisa: all things to all people.

In one venue he assures his audience that the budget will be “people friendly”, and in another he assures a group of foreign investors that there will be “no new taxes”. To an industry body he says the budget will be “growth oriented” and seek to create jobs, then elsewhere in a “pre-budget seminar” he says austerity measures are required to cut bank borrowing. In the same speech he says they plan to enhance the Public Sector Development Programme, and that “present economic policies will be continued”.

None of this is surprising. The eclectic stew of commitments that Mr Shaikh is serving up in the run-up to the speech on June 1st in fact reflects the complicated circumstances under which the budget is being drawn up.

This is an election year budget, which means pressure for goodies such as development projects will be immense. Most governments find it very hard to raise revenue or control spending during election time.

On the other hand, the government has quietly approached the International Monetary Fund (IMF) for a loan, as outflows of foreign exchange are set to accelerate as debt repayments rise to more than $5 billion in the forthcoming fiscal year. For the IMF the yardstick to judge performance is fiscal prudence, and deficit reduction.

The prevailing view amongst bankers and industry leaders is that the budget is so hamstrung by contradictory pressures, and so hemmed in by the large allocations for debt servicing — estimated at 80 per cent of net federal revenues — defence and subsidies, that there is little more for Mr Shaikh to do than tinker at the margins and hope for the best.

“I think they will simply muddle through till the interim government comes in,” says a top banker based out of Lahore. “They’ll run the reserves down and let the interim government do the dirty work of getting onto an IMF programme. At this point, this government is in no position to make any decisions on anything.”

The fresh approach to the IMF comes at a time when Pakistan’s relationship with its western creditors is in tatters. The last IMF facility, signed in Nov 2008, was terminated prematurely in October 2011 for failure to implement a key provision: the VAT.

And goodwill amongst the international community, something the government was able to call upon on at least two occasions while its cooperation in the war on terror was visible, is now exhausted.

“Pakistan must make all efforts to ensure the resumption of financial inflows,” the State Bank warned in its last quarterly report, hinting at the economic cost of staying in a defiant posture towards our creditors and allies in the west.

That advice is now gaining urgency and perhaps lies behind Mr Shaikh’s hushed approach to the IMF. What preconditions will the IMF set for any assistance?

“A key element of the last programme was the ending of exemptions and special regimes (SROs) under both the GST and the income taxes,” says Dr Ehtesham Ahmed, who served as an Executive Director on the board of the IMF, looking after Pakistan’s programme.

“This could have been done without reference to Parliament, and was indeed Plan B, attempted with IMF support in March 2011—but then you had SRO 283 of April 1, 2011”

SRO 283 was the infamous order issued by the FBR last year that resurrected tax exemptions for a long list of items only days after the government had tried use executive action to clamp down on this culture of exemptions and special regimes that has punctured holes in our tax code, making it look like a lump of Swiss cheese.

Removal of these exemptions was meant to be “plan B” launched in the aftermath of the failed RGST effort of 2011, but did not survive more than a week under pressure from the business community.

The order listed 185 items that would enjoy special rates of Sales Tax, most at zero per cent, and it infuriated the IMF which signalled its displeasure in strong language shortly afterwards and discontinued all disbursements.

“So a key test will be the repeal of SRO 283, and other assorted SROs since then,” continues Dr Ahmed.

Pakistan will also have to fight to be heard as the western world becomes increasingly preoccupied with the economic crisis engulfing the Eurozone.

“Already, Greece is asking for Pakistan terms,” says Dr Ahmed, pointing out that the IMF cannot afford to show leniency to one country without creating a chorus of demands for similar treatment from another group.

But repealing these tax exemptions is likely to create a furore amongst the country’s powerful business community, whose leaders enjoy privileged access to the top corridors of political power. Under the present circumstances, the government is unlikely to pick a battle with this powerful constituency.

Stuck on this tightrope, Mr Shaikh is now left with little choice but to give all commitments to all constituencies, and hope that he can bargain some ground back through private quarters at a later stage. As a result, he’s playing his cards close to his chest.

But the real fear is that he’s not holding any cards, has no strategy and is only biding his time till his term ends. The real fear is that nobody is in charge, that the budget is going to be the Mona Lisa smile without the enigma, and certainly without the genius of Da Vinci standing behind it.