The cabinet approved the federal budget 2014-15, with a total outlay of Rs3.945 trillion and the budget is in the parliament ready for debate in four days. For the first time, the President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Zonal Chairman PFCCI Islamabad and VP SAARC Chamber of Commerce and Industry in Pakistan have been invited to observe the proceedings. With lobbying interests present, this is unequivocally a business friendly budget. What government has been achieving is 70 to 80 percent of its economic targets, which is not bad. Industrial growth is good and the Finance Minister has greater targets for services and investment.

Of the spending that causes ire amongst the masses, an amount of Rs1.347 trillion will go to debt servicing next year. This is a third of the total budget. The defence budget will be Rs 700 billion, 11 percent more than this year. There is no focused plan to reform the energy sector but the World Bank will give $700 million for Dasu Dam by the end of June.

The rise in food and energy prices is not just a Pakistani phenomenon, but is fed by global markets and international prices. For a country like Pakistan that is dependent to a large extent on imports with even staples like wheat being imported, added to which local agriculture faces rising input costs of water and power, local prices are subject to international energy prices.

There will be a little outrage and complaining over the budget this month, and then it might be forgotten in the midst of other crises. All in all, the budget is formulated how it usually is and political analysts will critique it profusely, forgetting that it’s a budget and not an economic panacea, it includes allocating resources and basically that’s it. The government has certain outlays that it has to fulfill, and within the budget, its hands are to some extent, tied. If we look at the expenditures this year or last, they are almost identical; any annoyance by opposition parties is a bit unwarranted. The previous governments, including the Nawaz government, have never achieved any revenue targets. And in times of fiscal austerity, subsidies do need to be cut until the tax net can be widened. The only counter to this is private investment in the services and industry that will create more competition that might stabilize prices and create more jobs and higher wages.