Economists term budget unrealistic

Economists on Friday termed Fiscal Budget 2012-2013 an ambitious but unrealistic, saying that the budgetary estimates are unlikely to be achieved. "This is an unrealistic budget for the country's ailing economy and there are no incentives for the general masses," said renowned economist Dr Shahid Hasan Siddque. He said that the finance minister announced a budget with high revenue and expenditure targets, but did not say a single word as to how these targets would be achieved.
"Tax, saving and investment to GDP ratios' targets for next fiscal year are in fact too low to achieve an accelerated growth, which is necessary for generating more revenue and create new employment opportunities in the country," he pointed out. The federal government has not announced measurers to curtail tax evasion and expand tax net to achieve revenue target of Rs 2380 billion for 2012-2013, he said and added that the government was loosing some Rs 1900 billion annually due to tax evasion and non-payment of taxes.
"Tax revenue is unlikely to be achieved but even if realised than a large portion of it, estimated to be Rs 1400 billion, will be transferred to the provinces under the NFC award, while another amount of Rs 900 billion will be spent on debt payments. In such a situation, how the government will manage its accounts?" he questioned.
The government has presented an ambitious budget with no new tax at a time when economic condition is fragile and needs preventive measures to achieve better growth, said Muzammil Aslam, an economist at JS Global. He said that government had set a very high revenue target of Rs 2380 billion, which seemed unachievable as no new tax has imposed and rate of some taxes has been reduced.
"At a time, when the government has already failed to realise the outgoing fiscal year's revenue target of Rs 1950 billion, the new target is seemed unrealistic" he added. As this year general elections will be held, it is expected that the budget deficit will remain higher than the target followed by rising government expenditures, he added. "The government has estimated Rs 46 billion through auction of Euro bonds and Rs 72 billion through privatisation, but it is unlikely to be realised owing to poor economic performance," Muzammil said.
Sayam Ali, an economist at Standard Chartered, said that in short term it's a very difficult budget, however in long term it will put many positive impact on the economy as the government has announce several measurers to boost the industrial activities. However, he said, government's some estimates including subsidy, fiscal deficit, revenue target and expenditures are not based on reality. "There is no chance to achieve these targets," he opined. Sayam said that government has already missed 3G auction and privatisation target during this fiscal and again deepening on these external inflows. He appreciated government's announcement to rationalise the GST at 16 percent for all sectors.