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Reflections on an inclusive budget

Updated May 15, 2017 08:05am

Regardless of the budget strategy, the majority of tax experts and development thinkers stress an inclusive approach for achieving pro-poor economic growth and sustainable development.

Therefore, rural areas and agriculture development cannot be ignored, particularly those projects and programmes that are focused on the welfare of small and landless farmers.

Before the budget presentation, a competitive race starts between politicians and economic experts regarding whose views will be incorporated. Political will is shaped by rich voters — who ultimately control a huge chunk of vote bank. Economics, as a science, is not very meaningful for such a will.

Some friction is visible across political parties on various budgetary initiatives. Similarly, economists and policy experts are also divided across many issues such as taxation, the investment environment, business incentives, and perks and privileges for the elite.


A budget aimed at fulfilling national pledges and international commitments is needed, the core of which should be more cognisant of economics than politics


Other stakeholders, particularly the business community, have a circle of influence for gaining tax and credit benefits while government servants impart pressure for increased salaries and allied allowances. All such odd pressures and persuasions from diverse stakeholders distort the formation of the budget in a purely economic sense.

Budget calculations are quite tricky and mind boggling. Even the best experts working in the field of fiscal economics remain in doubt because of budget statistic complexities such as a weak data base and dearth of expertise in empirical data management.

Moreover, experts working in different components of the budget are hardly aware of what is happening in allied components. This compartmental isolation in budget data analysis for a common cause does not remain holistic.

One can easily observe the inconsistency in the symmetry of budget sections and lack of cohesion across statistics. Many economic activities are not accounted for in the budget revenue and tax estimations. Under such a situation, juggling with numbers becomes more important than the real-time importance and subsequent implications of those numbers for budget-making.

A standard fiscal budget needs to be ‘qualified’ in many respects, each of which is reasonably important for ensuring its inclusive nature. Rigorous analytical work is needed to be backed by all the allocations in various sectors of the economy.

Besides academic research going on throughout the year, the best thing is to arrange a series of consultation workshops of key stakeholders. For example, all provincial and districts governments can be taken on board for understanding grass root level issues and concerns of budget beneficiaries.

Similarly, chamber bodies, business associations, media persons, independent economists and commercial attaches working in various embassies can be heard for rationalising the fiscal direction in commerce, business and trade.

Special research groups can be constituted for identifying workable narratives both of the revenue and expenditure sides. A transparent analysis of what works and what does not is required.

The budget sets the course for business, commerce and trade. After the 18th Constitutional Amendment, alignment of budgetary estimations needs to be maintained with provincial budgets. A clear cut policy appendix must be given in the federal budget regarding the share and contribution of provinces in different accounts and heads.

It is also important to make q serious effort to develop a technical budget rather than a bureaucratic budget. Gender Responsive Budgeting, once a dream, should be adopted by civil society. This can be attained by cutting taxes and government fees for women.

A budget aimed at fulfilling national pledges (Vision 2025) and international commitments (e.g. SDGs) is needed — the core of which should be more cognisant of economics than politics.

After the 18th Amendment there is a serious need for developing a rational mechanism for boosting provincial revenue shares, therefore budgetary preparations should be made inclusive by taking technical support from all political parties. This is important for strengthening federalism.

Political stability is actually a proxy denominator of economic stability. It has strong connections with the annual budget which is the ‘grand test’ of politicians along with state economists on how they are delivering and how they intend to deliver for the economy.

But the facts and figures are not as important as their configuration across sectors, provinces, regions, communities and gender.

— The writer is Dean, Faculty of Social Sciences, PMAS Arid Agriculture University, Rawalpindi

Published in Dawn, The Business and Finance Weekly, May 15th, 2017