Dreaded new budget

A report released by the International Monetary Fund (IMF) presents a bleak picture vis-à-vis the budget for the next financial year as it will add significantly to the burden of the common man, who is, otherwise, expecting relief in view of renewed inflationary trends triggered by recent governmental actions. With Rs 430 billion in new budgetary measures and an 18 per cent higher petroleum levy, the IMF has targeted Pakistan’s federal revenues at Rs 17.145 trillion for 2026-27, along with a series of administrative and policy measures committed by the government for the federal and provincial budgets to be passed by Parliament. The report showed that Pakistan had to commit and deliver three major prior actions to make up for slippages on programme benchmarks before the IMF’s executive board finally approved the disbursement of $1.3 billion under both facilities. These included Rs 136bn lower grants to the provinces, Rs 322bn in recoveries following favourable court decisions relating to super tax and full pass-on of fuel prices after the government’s initial hesitation following the US-Iran war. People of Pakistan witnessed unprecedented increase in the prices of petroleum products, which have almost doubled since the Gulf war, resulting in a vicious cycle of price-hike of goods and services. The prices were repeatedly adjusted upwards without any justification as neighbouring India hiked the prices for the first time (after the war) by just 3% on Thursday. In the case of Pakistan, taxes on POL products are imposed to make amends for the shortfall in tax collections. The increase in the so-called petroleum development levy is already making lives of the people miserable but the Government has committed to jack it up further during the next financial year. This could mean that the prices of petroleum products will not revert back even if prices in the international market fall — because of uncalled-for taxation. Another commitment pertains to timely tariff adjustmen