KARACHI, June 7: The Muttahida Majlis-i-Amal has termed the federal budget 2005-06 a traditional budget in which maximum relief has been provided to the corporate sector without addressing grave economic issues or providing relief to the common man.

Rejecting the budget, MMA chief Qazi Hussain Ahmad said the budget would complicate economic issues, deteriorate the investment climate and lead to further increase in poverty, as whatever relief was given to people would be swallowed back by inflation.

He said that in the budget, the current account was shown in deficit. On the other hand, banks offered loans of Rs77 billion for luxuries, which would not in any way help in developing the economy.

He said that when inflation in the budget of 2003-05 was 6.29 per cent, it was termed to be at a dangerous level, but now it had gone up to 7.9 per cent in the 2005 budget, which manifested a falling economy.

“The budget has been presented without the NFC Award, which is a dangerous trend and may result in creating a sense of deprivation among the provinces. As such, it is an incomplete budget,” the MMA chief said.

Expressing his apprehensions about the budget that it was not going to reduce poverty in rural areas, he said that being a deficit budget, its deficit would be met by more privatization, which was harmful for national interests.

Increase in foreign exchange reserves had been blocked, inflation rate had gone up from 4.6 per cent to 9.4 per cent while the sensitive index had reached 12.8 per cent which was a manifestation of the economy’s failure.

He said the present foreign exchange reserves were equal to 35 weeks of imports while they were equalled 45 weeks of imports last year.

“This negated government claims about increase in the foreign exchange reserves.

“Our capacity to payback loans has also come down and the economy will not be able to sustain any shock,” the MMA president said.

Minimum wages were insufficient to meet the requirements of a small family, he said, suggesting that the minimum wage of a worker should be Rs4,500 instead of Rs3,000.

He pointed out that no measures had been suggested for the elimination of corruption and transfer of accounts abroad.

“In view of the above ground realities, the budget stands rejected and the MMA legislators would continue their struggle to provide relief to the people,” the MMA chief said.

The PML-N Sindh Organiser and former Sindh Governor Mamnoon Hussain said there was nothing in the budget to reduce price hike, unemployment and lawlessness – the main issues confronted by people.

He said the number of people living below the poverty level in Sindh and Balochistan had increased while there were no measures to provide them relief.

Mamnoon said that income targets in the budget had been on the higher side while exemptions were given on duties, asking how revenue target could increase then. He believed that these targets would be met through mini-budgets, which could be in the pipeline.

Veteran Politician Mairaj Muhammad Khan said the new budget was a friendly- budget for industrialists, traders and the ruling class in which 55 million people, living below the poverty line, had been completely ignored. He said despite claims of putting education and health sectors third on the priority list, no substantial allocation were made for them.

While the Rs300 million shown for reduction of poverty would be consumed by the bureaucracy.

Likewise, no plans and projects were prepared for increasing exports, or improving the conditions of farmers and people living in villages.

Above all, injustice had been done to provinces by passing the budget without the NFC Award.

Mr Arif Alvi of the Tehreek-i-Insaf said the budget was disappointing for the common man, as it would further increase their miseries, adding that no concrete steps were suggested to check price hike and unemployment.

Qari Muhammad Usman of the JUI-F said the budget would make the poor poorer and the rich richer.

He said it appeared that the budget was not prepared in Pakistan but by US technocrats, “from where the Prime Minister had been imported” since ground realities were totally ignored in the budget and weight had been given to capitalists and waderas and landlords.

Mr Nasir Mansoor of the Pakistan Labour Party said no relief had been provided to the people living in rural areas and the working class.

He said the minimum wage of Rs3,000 had been promised three years back, but “now that the inflation has already reached 9.4 per cent, this Rs3,000 will be reduced to Rs2,000 as real wages.”