Pakistan Federal Budget FY 2020-21: Analysis and Discussion Thread

[Norwegian]

Increase of 11.85% proposed in #Defence Budget of Pakistan. Increase of 1.3% in #Health Budget is also proposed. 220 million Pakistanis vs 8 lakh Pakistan Army. Something really wrong here.

This govt is backed by the armed forces so naturally they will get their cut.

 

[Jungibaaz]

PTI will stabilize the economy by 2023, twin deficits are already brought under control. And then people will bring back PPP+PMLN to power to repeat the economic destruction that happened between 2008 and 2018.

I hope so, but it’s too soon to tell. And although PMLN did mismanage the current account and PKR. I think they meant well, they were a little too focused on temporary progress (lower inflation and good growth for the people), and also a lot of the ballooning was caused by a big bill of CPEC imports. As was the leverage and increase in sovereign debt.

Actually, PTI should not undermine the capex work done under PML, it’s crucial. It just needs to be a lot more careful and adjust the balances in such a way that it doesn’t cause another bailout requirement in the next 5-10 years.

I don’t ascribe blame to any government overall for giant economic trends which they only have a few years to partially influence. But let’s hope for the best. I hope this cycle breaks under PTI, but I’m not yet convinced. Just like now, PPP cleaned up Musharraf’s mess, PML cleaned up PPP’s when they came, and now PTI is cleaning PML’s legacy. The cycle and timing just after election is uncanny.

 

[Pakistan Ka Beta]

How Pakistan are going to finance 1406 Billion Rupees of Defence budget?

What about the rest 220 million Pakistanis are going to do.

1290 billions Rupees for defence budget not 1406 billion Rupees . After 18th Amendment Education , health e.t.c are now Prov matters . For that budget of Provinces /NFC share was increased .

Increase of 11.85% proposed in #Defence Budget of Pakistan. Increase of 1.3% in #Health Budget is also proposed. 220 million Pakistanis vs 8 lakh Pakistan Army. Something really wrong here.

health and Education are now Provincial subjects . Except HEC for which 34 billions are allocated .Kindly first study the constitution .

This govt is backed by the armed forces so naturally they will get their cut.

health and Education are now Provincial subjects after 18th Amendment . Except HEC for which 34 billions are allocated .

 

[Norwegian]

I don’t ascribe blame to any government overall for giant economic trends which they only have a few years to partially influence. But let’s hope for the best. I hope this cycle breaks under PTI, but I’m not yet convinced. Just like now, PPP cleaned up Musharraf’s mess, PML cleaned up PPP’s when they came, and now PTI is cleaning there’s. The cycle and timing just after election is uncanny.

This is due to cultural impatience of Pakistanis. Already first year into office, they get tired of their newly elected popular govt. Compare that with China that has CCP in power since 1949 and yet the chinese want more of it.

 

[Jungibaaz]

Increase of 11.85% proposed in #Defence Budget of Pakistan. Increase of 1.3% in #Health Budget is also proposed. 220 million Pakistanis vs 8 lakh Pakistan Army. Something really wrong here.

Partly circumstance, but army has been asking the government for more money for a long time. This is part of the governments motivation vis a vis 18th amendment.

In an ideal Pakistan, just like accountability attempts elsewhere. Army should be audited, a full account of all of their current expenditure taken (“current” exp. means something different financial terms). I think the army should be asked rightly to reduce waste and any unnecessary expenditure at times like this. At the risk of sounding too political in this thread, this government will never do such a thing , and other governments have never had the guts to hold firm, let alone do it.

If the government can balance books on the back of more managed defence exp. Save Rs. xyz bn on defence and invest in crucial capex, the boost to the real economy would be for every rs saved will be multiplied via the right projects. I think generals today understand the importance of economy, but they need to be pushed a little further in this direction.

 

[Norwegian]

Partly circumstance, but army has been asking the government for more money for a long time. This is part of the governments motivation vis a vis 18th amendment.

Government dares not to say no to constant increases in military spending. It has nothing to do with 18th amendment. But because fear of being sent home under martial law or some other judicial coup.

 

[Jungibaaz]

This is due to cultural impatience of Pakistanis. Already first year into office, they get tired of their newly elected popular govt. Compare that with China that has CCP in power since 1949 and yet the chinese want more of it.

Agree partially, however... I was warning folks I know not to expect anything but economic pain for the next two years at least, this was around the 2018 election time. This was before covid so outlook was better. Particularly I was saying this to PTI supporters, their faces dropped when I would tell them to expect this, this and that instead of the promises made.

Impatience I agree with you, but the problem for IK was IMO that he promised the undeliverable, and he did it oblivious to the crisis that everyone could see coming. If I was his adviser I would impressed upon him that he is making promises that not only can he not keep, but he will have to do the exact opposite in order to keep Pakistan afloat. Awaam can’t be financial experts, if you tell them you’ll give them prosperity, they will expect it. I don’t blame ordinary man for being angry at the government either.

Government dares not to say no to constant increases in military spending. It has nothing to do with 18th amendment. But because fear of being sent home under martial law or some other judicial coup.
View attachment 641142

Correct, no government dare cross them. For now I can only hope that their recently revived interest in politics shows them that they need to be a little more partial to austerity.

 

[Norwegian]

Impatience I agree with you, but the problem for IK was IMO that he promised the undeliverable

It's not his fault. If you tell voters the reality of financial pain ahead, nobody will vote for you. Politicians sell empty promises detached from reality. And the best seller of these promise win elections.

 

[Syed1.]

It's not his fault. If you tell voters the reality of financial pain ahead, nobody will vote for you. Politicians sell empty promises detached from reality. And the best seller of these promise win elections.

Not to forget in 2013 Nawaz Sharif promised exports to be at $100b, bullet trains and international airport in every district etc

 

[Norwegian]

Not to forget in 2013 Nawaz Sharif promised exports to be at $100b, bullet trains and international airport in every district etc

This is what he actually promised:

 

[313ghazi]

Government dares not to say no to constant increases in military spending. It has nothing to do with 18th amendment. But because fear of being sent home under martial law or some other judicial coup.
View attachment 641142

If you have the data available you should compare that with the rest of the budget? Maybe create a graph of percentage of budget share per year? I'd be interested to see the results.

 

[Norwegian]

If you have the data available you should compare that with the rest of the budget? Maybe create a graph of percentage of budget share per year? I'd be interested to see the results.

It is quite difficult since military spending in Pakistan is never revealed completely in official documents.

 

[Cookie Monster]

Trade and current account deficits are already at their lowest. So fiscal deficit doesn't matter much.
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You mean you are waiting for Patwaris+Jiyalas to comment on the budget?

Don't invite political mudslinging...
It would be highly appreciated if ppl can keep it a clean and objective thread. I would request mods to keep a close eye on this thread and this should become a sticky...
Maybe even have these threads for every budget...so that information can be pooled and progress can be easily tracked over the years.

@Arsalan @waz @The Eagle @Moonlight

 

[Pakistan Ka Beta]

Government dares not to say no to constant increases in military spending. It has nothing to do with 18th amendment. But because fear of being sent home under martial law or some other judicial coup.
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Kindly also campare it with rate of dollar in Pakistan during these times . Indian budget and their dollar rate too .

Partly circumstance, but army has been asking the government for more money for a long time. This is part of the governments motivation vis a vis 18th amendment.

In an ideal Pakistan, just like accountability attempts elsewhere. Army should be audited, a full account of all of their current expenditure taken (“current” exp. means something different financial terms). I think the army should be asked rightly to reduce waste and any unnecessary expenditure at times like this. At the risk of sounding too political in this thread, this government will never do such a thing , and other governments have never had the guts to hold firm, let alone do it.

If the government can balance books on the back of more managed defence exp. Save Rs. xyz bn on defence and invest in crucial capex, the boost to the real economy would be for every rs saved will be multiplied via the right projects. I think generals today understand the importance of economy, but they need to be pushed a little further in this direction.

I hope u mentions PML.N , PPP , ANP e.t.c corruption/assets e.t.c as u mention pushing Generals . Every year there is a gradual increase . Keeping a pace with India . Accountability in Army is still better than political parties and Judges . After 5th August 2019 and RSS designs towards GB n AJK and American military aid almost nothing , increase is must . Compare it with Iran , Afghanistan defense budget . There is no martial law in Pakistan from 12 years . You should ask the civilians about the economy . Education , Health , Tourism and many other subjects after 18th amendment are now Prov subjects and for that their NFC share has been increased .

 

[Jungibaaz]

Kindly also campare it with rate of dollar in Pakistan during these times . Indian budget and their dollar rate too .

It doesn’t warrant comparison with India, their GDP growth has outpaced ours consistently for most of those recent years, that too without any serious fiscal or current account crises that require belt tightening and reduction. Our army budget has been expanding at a rate that isn’t sustainable given the needs of the economy and available fiscal space. It’s also less about volumes, more about rate of change and comparative circumstance.

I hope u mentions PML.N , PPP , ANP e.t.c corruption/assets e.t.c as u mention pushing Generals . Every year there is a gradual increase . Keeping a pace with India . Accountability in Army is still better than political parties and Judges . After 5th August 2019 and RSS designs towards GB n AJK and American military aid almost nothing , increase is must . Compare it with Iran , Afghanistan defense budget . There is no martial law in Pakistan from 12 years . You should ask the civilians about the economy . Education , Health , Tourism and many other subjects after 18th amendment are now Prov subjects and for that their NFC share has been increased .

Allegations of corruption are a legal matter, what I’m talking about is budget allocation. The former isn’t always proven and certainly not quantified, whereas the latter definitely is quantifiable and a part of public record.