What Pakistan’s budget tells us
The economy, even if restrictively understood, is an immensely complex, always complicated, and often confounding set of interrelated interactions amongst individuals and institutions, society and government, production and consumption, scarcity and abundance, and much more. Government budgets, important as they are, are nonetheless mere accounting instruments, and that too along only one key dimension: fiscal flows.
However, no matter how you define it, government budgets are, at the very least, a vital lubricator of what happens in and to ‘the economy’.
How government generates revenue and how it chooses to spend it (which, by the way, is what a budget is!) is often a defining determinant of growth, of inflation, of employment, of indebtedness, and ultimately of the well-being of the economy, of society, and of the citizen.
Popular discourse in Pakistan, as in many countries like our own, tends to view government budgets as a collection of ‘measures’, ‘relief’ and ‘allocations’. This is as it should be. After all, these are the very things that hit people (and institutions) directly. However, behind the lines in the budget speech that garner the cheering or the booing, there are at least three conceptual dynamics that embody the policy importance of government budgets.
First, all budgets, everywhere, individual, household, institutional, corporate, cities, national or other, are planning tools. They can sometimes also become instruments for reporting or management, but that is not their original or primary purpose. At a fundamental level, they are forward-looking plans based on estimates and projections of incomes and expenses, which are tracked to make sound operational decisions.
Next, and especially in government budgets, the language of decision-making is fiscal: from where the government chooses to raise money, and what it chooses to spend it on. It is these decisions, decisions that are embedded in the budgets themselves as well as decisions they lead to, which gives government budgets their outsized policy importance.
Finally, importantly, and again especially for government budgets: budgets are not just statements of intent, they are statements of aspiration. Senator J. William Fulbright is famously quoted as having said that “a nation’s budget is full of moral implications; it tells what a society cares about and what it does not care about; it tells what its values are.”
If the above is so, then here is what you should be asking yourself as you pour over the images on these pages: (a) if budgets are planning tools, then what is our plan? (b) if budgets are a representation of decisions, then what decisions are our governments taking on our behalf? and (c) if budgets are a moral reflection of our values, then what is it that we care about, and what that we do not?
As you ponder on these questions, maybe this is a good place to move from the profound to the practical.
Because that is where the answers are likely to lie. But, first, a little biography and a confession: I have always been a ‘budget geek’. As a kid, I remember my father, a frugal, middleclass, government servant, getting ‘all serious’ about the budget. Before it was announced, the discussion with his friends was all about what the budget might bring.
Would there be ‘relief’? Should one expect new taxes? Will they announce any new ‘schemes’? After the budget speech, he would spend the week trying to decipher what had just happened.
At some point, by the very early 1980s, I myself started taking notes during the budget speech.