The Abbasi government’s hyperactivity on the economic front, in the last quarter of the five year electoral term, is clearly marked by a parting signature stroke by PML-Nawaz.

The recent steps aim to assert political power, mobilise support of asset owning classes/ urban constituency and consolidate economic achievements.

The key moves — rupee devaluation, re-constitution of the Economic Advisory Committee, commitment to launching the Pakistan Economic Survey and presenting the Budget 2018 ahead of time, along with the snap announcement of tax reforms and the tax amnesty scheme — followed each other in quick succession.

Are the recent steps taken the desperate responses of a besieged government? Is the government supervising the budget exercise to cover up its helplessness on the external front?

Are these the desperate responses of a besieged government facing the threat of insolvency as the country’s reserves dwindle and there seems to be no guaranteed source of replenishment?

Is the government supervising the budget exercise to cover up its helplessness on the external front?

The budget, in a resource starved Pakistan, is not a happy exercise. Reconciling the demands and interests of the competing segments (manufacturers, traders, agriculturists, masses) in one national document is a tricky manoeuvre.

Why then did the Abbasi government insist on taking on a difficult task that it is not obligated to? No one expects the forthcoming budget, with a greater focus on stabilisation, to generate political capital. The fact that the document will become applicable July 1, a month after the prime minister relinquishes power makes the rigmarole appear futile.

Many experts and some senior members of the bureaucracy were critical of PML-N for trying to stretch its agenda beyond its mandate. The government, however, forcefully defended its conduct in the closing days of its rule.

Prime Minister Abbasi, in his message to Dawn, argued that the economic decisions taken are not random reactions but components of the PML-N strategy before it returns to the ballot.

“We do not consider ourselves to be a ‘troubled government’. We intend to work till the last minute of our tenure.

“Every step we are taking is well considered and well thought out. It is not fair on our part to leave the caretaker government without a financial roadmap for three months”, the prime minister’s mail read.

“The next government can amend the budget to its liking. But I assure you, there will be few changes, if any. The budget in this country is not rocket science. We are doing the numbers and will float the budget as promised”, he argued.

Miftah Ismail, adviser to the prime minister also contested the perception of an ‘economic crisis in the making’. He told Dawn that the economy is in an expansionary mode and the real challenge is to sustain its thrust.

“The economy is on a high growth trajectory, inflation is down, interest rates are lowest in decades, credit to the private sector is at an historic high and fiscal deficit has been reduced, while the Public Sector Development Programme and social safety spending continues to rise. In 2018 10,000 MW of electricity and 1,200 mmcfd of gas will be added in the system”, he said.

“The increased investments under CPEC in energy, rail and road infrastructure and related sectors would spur industrial investment. The tax-to-GDP ratio has increased from 9.8 per cent (2012-13) to 12.5pc (2016-17)”, he added.

The Second Quarterly Report FY18 of the State Bank released last Friday endorsed the economic adviser’s views as it stated that key indicators point to higher growth during the current year on the strength of better performance of agriculture, services and manufacturing.

It, however, cautioned on the external account front. It noted that growth in export and remittances was overshadowed by rising imports. The current account deficit, therefore, increased to $7.4 billion in the first half of FY18, from $4.7bn last year.

The SBP pressed for concerted measures to preserve macroeconomic stability and the growth momentum.

A senior member of Prime Minster Abbasi’s economic team tried to defend the early budget on legal grounds.

“The budget has to be cleared by a parliament in a democratic system. As there is an over three month gap between the out-going and in-coming elected government, and the financial year ends in the interim period, it is a constitutional obligation that needs to be met”, he told Dawn over phone from Islamabad.

Dr Waqar Masood, former finance secretary, in his recently printed article, quoted Article 86 to show that the Constitution provides cover for the fiscal management for an interim period without parliament, not exceeding four months.

Another senior bureaucrat concurred with his view. “It is both unfair and unnecessary for the current government to present the budget. It has no moral authority to decide budgetary priorities beyond its own term. It should rather focus on the next 50 days instead of worrying for the year ahead”, he said sarcastically.

He mentioned the chaos in key economic ministries in the closing days of the government. “As it is the bureaucracy of Pakistan is not particularly efficient. Now that they know that the incoming set up might reshuffle the whole budget matrix they can’t be expected to perform to the best of their capacity”, he made a point.

Dr Nadeem Javed, chief economist Planning Commission, contested the opinion. “People are dressing their contempt for the current government in all kinds of narratives. They forget that there are scores of officers burning the midnight lamp to complete the extensive exercise in the limited time”, he said.

Dr Naeem uz Zafar, chief economist Planning Department of Sindh confirmed to Dawn that provincial budgets will follow the federal budget. “We are targeting to present the Sindh budget in the first week of May.”

Experts said it was interesting to watch how the Abbasi government is trying to make most of his remaining tenure in power.

“Giving up hope on other major political parties (PPP and PTI) against the pressure mounted by the deeper establishment, the PML-N has turned to its constituency of businessmen and urban dwellers, by proposing tax cuts for tax payers and tax amnesty for the propertied class, to generate political capital for his party”.

Published in Dawn, The Business and Finance Weekly, April 9th, 2018