Sherry Rehman terms Budget 2020-21 as a Failure on Multiple Levels

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ISLAMABAD, JUNE 12 / DNA / = In her response to the 2020 budget, PPP Parliamentary Leader in the Senate, Senator Sherry Rehman said, “This is not a national budget for a country facing a crisis. It squandered a huge opportunity to change  priorities, like diverting resources to health as percentage of GDP. Instead of that it cut money for the provinces who run the social spending.

As it stands this is not even a national budget. It’s a rolling accounting exercise led by the IMF. In four months they will be rolling the numbers again while firing people from jobs.

Sadly, like this Government, it is a set failures that Covid-19 has masked; Pakistan’s public finances were in free fall even before the COVID-19 outbreak, Pakistan’s economy was struggling to stay afloat with high interest rates, massive devaluations, crony capital sweet subsidies and falling exports. Revenue, which likes at the heart of every economy, never met their own targets, with one FBR head after another going through revolving doors. The costs of maintaining such a government will be felt by many future generations of Pakistanis and the damage they are doing, or done before covid is incalculable.”

She said, “The data released by the Pakistan Bureau of Statistics shows that the year-on-year inflation in January 2019 was 5.6%. Whereas, by January 2020, the percentage had spiked to 14.6%. It is a shocking record of the highest inflation surge in the world. This happened way before the coronavirus pandemic hit us”.

“This debacle of no-holds-barred borrowing was also done before Covid-19.

Total debt and liabilities of the country rose by Rs2.597 trillion in the period running from July 2019 to March 2020. The total is now at 102.6% of gross domestic product (GDP). PTI government during the first 13 months of its tenure has added almost 35% of the total debt that Pakistan had accumulated in the previous 71 years of its independence,” she added.

Rehman questioned, “Why is PTI government taking credit for the decline in Current Account Deficit (CAD)? The massive decline in the international oil prices, a major import item for the country accounted for the dip in our CAD. PTI government must state the correct facts. During PPP’s time in power, crude oil price was $147/barrel, yet the situation was nowhere close to what it is now”.

She said, “As per the Pakistan Bureau of Statistics, till last year there were 1,279 hospitals in the country. No new hospitals were added in the years 2018-2019.  It is worrying that that our health spending is still around 1.3% of the GDP despite WHO saying that countries should be spending at least 5% of their GDP on health. Given that the pandemic has shook our health infrastructure, we need to urgently revise our health budge. It is shocking how after devolution, the provinces which bear the load of the health budget were not even heard”.

“Climate change has as always been not given much importance even though Pakistan has been ranked globally in the top 10 countries most affected by climate change in the past 20 years owing to its geographical location. According to ADB, the socioeconomic costs of environmental degradation were considerable with climate adaptation needs ranging between $7 billion and $14 billion per year,” Rehman added.

The Senator said, “Even though the agriculture sector target grew by 2.67% against the target growth of 3.5%, this governments inaction had pushed millions of farm workers and small and subsistence farmers under poverty. It is also important to point out that the new locust invasion, which was not checked in time,  will cause a loss of Rs 600 billion to Pakistani economy which will be devastating for Pakistan as agriculture accounts for 20% of GDP and 65% of the population live and work in agricultural areas”.

Commenting on the disastrous revenue collection, she said, “FBR management is trying to justify its poor performance by hiding behind the Covid-19 situation. In the pre-Covid-19 situation, the FBR had sustained a shortfall of Rs693 billion. In April, the FBR provisionally collected Rs242.5 billion in taxes, down by Rs48 billion or 16.5% when compared with the collection in the same month of last year. This low revenue collection will have serious implications for the country’s debt”.

Senator Rehman concluded by saying, “The federation has been put at risk by this government’s shambolic governance. Their inability to see beyond party narrative and personal egos has destroyed any vestige of institutional reform. Pakistan is facing two shocks: one of Covid-19 and the other of Nazism”.