This is apropos a Business Recorder editorial "elevated fiscal imbalance" carried by the newspaper recently. The newspaper has concluded by arguing that "[T]he sad aspect is that no political party is thinking about tax reforms or withdrawal of tax exemptions and concessions to set matters right. Budgets for both FY18 and FY19 were very soft because the elections were very near and the PML(N) government wanted to appear poor friendly and pro-business. It even delayed the depreciation of the rupee for a considerably long period. The caretaker government is here only for few weeks and does not have the mandate to take very harsh measures. All eyes will be on the post-election government which may or may not choose to swallow the bitter pill."
That the next government will be swallowing the proverbial bitter pill is a fact as an IMF bailout appears to be the only option for the new incumbents to address, among other things, the external account in particular. What can any government do when its central bank is running down its foreign reserves and devaluing country's currency?
Comments
Comments are closed.