Budget approval sans opposition

The National Assembly passed the Finance Bill 2017 and for the first time in its history, no cut motions were raised due to the absence of opposition parties. This is an extremely disturbing precedence and is yet another example of the Sharif administration's indifference to democratic norms: vibrant parliamentary debate that allows for an exchange of ideas between members adhering to different political and economic ideologies thereby enabling the government of the day to formulate more holistic policies. While it is evident that the opposition parties could not have actually blocked the Bill because its passage requires a simple majority which the government has, yet by allowing debate it would have fuelled the perception that it is willing to heed and respond to the concerns of the opposition as well as taking on board some of their valid suggestions.
The Sharif administration during its third tenure has been reluctant to not only employ available tools to deal with differences of opinion, reflected by the failure to call a meeting of the Council of Common Interests every three months or agree on the 9th National Finance Commission award as required by the constitution; but has resisted attempts by the regulatory bodies to provide checks and balances to some rather outlandish policy proposals by the line ministries by issuing a notification subordinating these regulatory bodies to the ministries which was successfully challenged in court.
The two parliamentary standing committees on finance represented by political parties according to their numbers do formulate a set of recommendations for consideration by the Finance Minister and in this context, Ishaq Dar did state in his closing remarks that around 75 percent of the recommendations would be incorporated. However, the National Assembly committee is headed by PML-N Qaiser Ahmed Sheikh who, as a loyalist, pushed through the bulk of Dar's proposals while few of the recommendations made by the Senate committee headed by PPP's Salim Mandviwalla were entertained. Be that as it may, Dar in his closing remarks identified three major pressure groups whose recommendations he approved - notably, the Federation of Pakistan Chambers of Commerce and Industry, All Pakistan Textile Mills Association, and appeased the stock market players by making the new capital gains tax rates applicable on shares that will be bought two weeks hence on or after 1st July 2017.
However, these recommendations focused on adjustments to the taxes imposed in the budget for 2017-18 and therefore did not challenge the government's expenditure priorities in the budget. Had the opposition been present there is no doubt that serious economic issues that plague the economy today would have been aired - issues that are being swept under the carpet by the Dar-led Finance Ministry through blatant manipulation of data.
Heavy reliance on borrowing both from domestic and external sources has been a source of serious worry for Business Recorder as well as independent economists for two reasons. Since Dar took over the portfolio he has increased reliance on borrowing from the commercial banking sector abroad, at high rates of return and very short amortization period, which stands at 2 billion dollars today leading to outflows in December 2016; and a massive rise in debt equity through issuance of Eurobonds and sukuk at rates well above the low international interest rates prevalent in the West. Additionally, Dar is understating external debt servicing plus payment of principal when due in the budget by supporting an overvalued rupee (with a massive negative impact on exports) and domestic borrowing by reducing the interest rate on national savings schemes (negatively impacting on the income of the vulnerable) which accounts for a decline in savings requiring ambitious investment targets to be funded by borrowing from abroad.
However, there is a consensus that budget documents are no more than wish lists with respect to development expenditure and revenue generation and their applicability is not even effective on the first day of the new fiscal year, i.e., July 1. This is more relevant this year as Dar presented the budget nearly six weeks before the end of the fiscal year which implies his expenditure and revenue projections for the outgoing year are even less likely to meet the claims in the budget documents which, when coupled with the fact that it is going to be an election year, implies that 2017-18 budget documents would have very limited, if any, relevance to ground realities.