Federal budgets in Pakistan have historically been interpreted differently by various stakeholders. Governments invariably claim that their budgets are pro-people and pro-growth, while opposition parties criticise them as ‘anti-poor.’ The general public, meanwhile, feels that the expenses that affect them the most—such as electricity tariffs, petroleum prices, gas prices and the overall cost of living—are addressed nowhere in the voluminous budget documents. Instead, key rates are changed every now and then by the NEPRA, the OGRA, and the State Bank’s monetary policy committee. The federal budget for 2024-25 is no exception.

In our daily lives, budgeting often involves aligning expenses with income; if there is a discrepancy, either income must increase or expenses must decrease. However, for the government of Pakistan, the situation is more complex. Expenses consistently surpass income. This year, out of the net federal revenue of Rs 10.3 trillion, a staggering Rs 9.77 trillion has been allocated for debt servicing. This leaves the government with a deficit of Rs 8.5 trillion for its other expenses. To manage this deficit, the government will have to resort to borrowing. Any shortfall in revenue mobilisation will only exacerbate the deficit, necessitating further borrowing.

For many years, China has been Pakistan's lender of first resort and the International Monetary Fund the lender of last resort. However, since 2020-21, even bilateral lenders like China and Saudi Arabia have linked their support to Pakistan with IMF programmes. The IMF insists that Pakistan secure........

© The News on Sunday