In the midst of opposition demonstrations, Finance Minister Shaukat Tarin delivers the PTI government's FY2021-22 budget.

 

                                                                                                                        Dawn

All eyes are on the National Assembly as Finance Minister Shaukat Tarin presents the federal budget for fiscal year 2021-22 on the floor of the assembly.

Tarin began his statement by expressing his gratitude for the opportunity to present the PTI's third budget.

He acknowledged that there were many challenges, but that this administration had provided the groundwork for the economy to recover, and that it is now "moving toward progress and prosperity."

He noted that when the PTI took control, the economy was on the verge of collapse. 
"Everyone knows we were buried beneath a mountain of debt," he remarked, noting that the current account deficit had reached an all-time high of $20 billion.

To keep Pakistan from defaulting, Tarin said the PTI administration has to make all repayments.

Shehbaz Sharif, the Leader of the Opposition in the National Assembly, and Bilawal Bhutto Zardari, the Chairman of the Pakistan Peoples Party, are in the parliament, watching the budget procedures as legislators from their party scream anti-government chants.

Earlier in the day, Bilawal and Sharif met and determined that both parties would protest the PTI's budget together.

The government is aiming for a 4.8 percent GDP growth in FY22, up from 3.9 percent in FY21; if accomplished, this will be the biggest GDP growth since FY18.
Pakistan has already begun to grow as a result of the stimulus measures implemented following the commencement of Covid-19. 
A growth-friendly budget with an expansionary fiscal policy and a low-interest rate environment is expected to keep economic activity buoyant in the future.
Agriculture would be the primary focus of the forthcoming budget in order to attain stronger growth in FY22.

The fiscal balance will continue to be strained.

All of these projected measures, taken collectively, are likely to maintain fiscal balance under pressure. 

The administration will face a significant task in maintaining fiscal stability and improving fiscal health while pursuing a pro-growth, expansionary fiscal strategy. 

Negotiations with the IMF must be successful in order to achieve this balance.

The actual budget is unlikely to deviate much from previous commitments to the IMF nevertheless, the IMF may give some wiggle room in tax collection targets, albeit at a level close to Rs6 trillion.

Meanwhile, it's worth noting that Pakistani officials are currently in discussion with the IMF to finalize the planned budgetary adjustments.

 In order to keep the budgetary deficit low, it's possible that some of the aforementioned measures will be left out of the final announcement on Friday.