People-friendly or technocratic?

Former Prime Minister Nawaz Sharif, who the current Prime Minister Shahid Khaqan Abbasi as well as Advisor to the Prime Minister on Finance, Revenue and Economic Affairs Miftah Ismail have repeatedly declared is their supreme leader, has directed the government to prepare a "people-friendly" budget for next year. This directive flies in the face of the claim made by Ismail on 14th March during an interview with a section of the press that the Abbasi administration would present a "technocratic budget unlike the common perception that Pakistan Muslim League-Nawaz (PML-N) has planned to announce populist and politically-motivated schemes and measures to win votes as the past governments have been doing" - past governments that include the past two tenures of PML-N. Any claim by the Finance Ministry that the two are synonymous is hogwash as a people-friendly budget is associated with no new taxes while significant disbursements for an increase in development expenditure is made to maximize political gains in the forthcoming elections.
To state that a technocrat budget would be presented a month and four days before the end of the tenure of the incumbent administration and less than six months before the general elections - incidentally the need of the hour given the widening current account and budget deficit - was simply wishful thinking. And the former prime minister's directive may have disabused Ismail of his perception that he has the sanction from his party's political leadership to present a budget that does not give pre-eminence to political considerations.
In this context, it is relevant to note that the Abbasi administration released 30 billion rupees in one go to parliamentarians for development schemes in August 2017, thereby violating the disbursement mechanism in place which envisages release of 20 percent in the first two quarters followed by 30 percent in the last two quarters. These are mainly community development schemes identified by parliamentarians - schemes that economists and sociologists maintain would best be identified by local governments - and consist of sewerage, water supply, new roads, etc. This disbursement, critics maintained further, implied that the abysmally inadequate amount of 12.5 billion rupees earmarked for clean drinking water for all and energy for all initiatives received no funding. Additionally, 3.2 billion rupees was also released for another politically-motivated scheme titled Prime Minister's Youth and Hunarmand Programme against its budgeted allocation of 20 billion rupees.
Be that as it may, industrial sources claim that the government may not need to impose additional taxes in the budget 2018-19 as it has projected inflows of 5 billion dollars (over 515 billion rupees) through the implementation of the yet to be announced amnesty scheme for Pakistani nationals with assets held abroad. This scheme envisages a minimal tax that would literally pay itself given the recent 4.5 percent depreciation, and therefore the scheme would be more attractive for Pakistanis than keeping money in Western countries where tolerance for tax evasion/avoidance and black money is eroding day by day through the passage of new laws that place the onus of proof of source of income on the accused. Economists however argue that the success of the amnesty scheme is premised on the perception of those who hold assets abroad that bringing the money back to the country through this scheme would be more advantageous than the use of offshore accounts or buying property abroad or using the tax-free remittance mechanism and/or continuing the practice of under/over-invoicing (which would require amendments in the law and more rigorous checks on illegal outflows).
The fact, however, is that the PML-N administration's tenure ends early June and so Ismail may succeed in convincing the former Prime Minister to go along with a technocratic budget that would appease donors and facilitate the release of budgetary support next fiscal year in the event that the party forms the next government; what would be more critical to examine in next year's budget is the supplementary demands for the current year which may reflect the preponderance of political as opposed to economic considerations.