Revised budget

BUDGET 2023-24 that was passed by parliament yesterday after the introduction of large fiscal-tightening measures to sweeten it for the IMF might resuscitate the bailout deal with the Fund, stalled since last November. As Finance Minister Ishaq Dar said in his closing budget speech, the IMF’s concerns regarding the original budgeted deficit of 6.5pc of GDP have been largely addressed through the imposition of additional taxes of Rs215bn and spending cuts of Rs85bn. In its comments on the original budget unveiled in May, the IMF had said that it “misses the opportunity to broaden the tax base in a more progressive way”. The lender had also objected to certain other budgetary measures like the ‘no-questions-asked scheme’ to attract new dollar inflows from Pakistanis abroad. Unfortunately, the details of the new fiscal adjustments show that the government has wasted yet another opportunity to broaden the tax base despite meeting the IMF condition.