Prepared by IMF, current budget designed to increase loans, says Bengali.

Byline: Shazia Hasan

KARACHI -- 'The 2019-20 budget has deficit increases for the first time. There are small growth targets in there but bigger tax targets pointing to so many missing links. It looks like the budget, prepared by the International Monetary Fund [IMF], has been designed to increase loans,' said noted economist Dr Kaiser Bengali.

He was speaking during the launch of a report, prepared by him in collaboration with economist Iffat Ara for the Pakistan Institute of Labour Education and Research (Piler), titled Analysis of Budget 2019-20: Recipe for External Debt Trap? at the Karachi Press Club on Monday.

Dr Bengali feared an increase in the inflation rate during the current fiscal year because according to him industrial growth has decreased and imports have increased. He said most of the time the government figures were incorrect. 'The figures, the statistics point towards negatives but we are being told that the economy will improve. Perhaps they mean it will improve through inflation. Because when inflation increases, the taxes will also shoot up. Otherwise, I see no measures in this budget to improve the economy. In fact, it will push us into greater debts,' he added.

Calls for a ban on imports to help local industry create jobs

He said that unemployment rate would further increase because of a slowdown in industrial production as most of the industries have cut their production, and thus laid off employees with the decrease in working hours. This has adversely affected the income of the employees. 'And not just in the manufacturing sector, the number of employees in the services sector such as restaurants has also declined,' he said while also pointing out that the service standards of many restaurants had declined due to reduction in their employees.

'Over 95 per cent of the budget is allocated for meeting government expenses, debt service, defence and maintenance of law and order. This year there was only two per cent increase in the social protection budget,' he added.

'Gambling economy'

'Our economy is import-based as most of our raw material is imported. These days I cannot find local items in supermarkets and big departmental stores in our urban areas. We have converted our economy into gambling economy,' he said.

'Budget deficit is a big problem and last year the federal government reduced 28pc budget of the development schemes. This year further reduction is proposed in the budget. The government plans to privatise...