Here is how you can make sense of the upcoming budget

Pakistanis talk about the economy every year with a strange mix of exhaustion, urgency and vigour. As the budget season approaches words like default, reserves, inflation, taxes, power tariffs, circular debt and development cuts, start getting thrown around more often in conversations. And the main reason is that, the central anxiety around a budget is the same, will the budget cause hikes in prices? What does it signal? How will it affect me?

The budget is afterall an objective, empirical exercise and everyone should be able to deduce something from it, even if it is simple. But most public discourse around the budget comes from a place of bias and vindication. 

Without the proper tools to ask the right questions, the public discourse gets marred with political rhetoric by politically-tied “experts”, and inconsequential comparisons to the days of past glory (Remember when petrol used to be Rs x/ litre under (insert name) leader?). Meanwhile, no one calls out ideological inconsistencies between the budget speech and the numbers laid out. 

In most democracies, political debate is the thing that creates public demand, and public demand eventually shapes legislation. But if the public debate and demand are shaped by inadequate information, the legislation you get is like we get in Pakistan. Here, political parties often begin with their own narrative, turn that narrative into policy, and then ask supporters to defend it and opponents to reject it. In such an environment, something as astute as economic policy becomes a political loyalty test, which should not be the case.

What is the Budget?

At the centre of any country’s annual economic policy is the exercise called the federal budget. It is the document through which the government decides how much it wants to collect, how much it wants to spend, and how much it is willing to borrow to fill the gap between the two.