The outgoing government has little relief to offer to the poor.
Miftah Ismail said it’s impossible to make ends meet against the minimum wage of Rs15,000. But will the government fix that in its next budget? Not really.
The PML-N-led government will announce its sixth budget on May 12. It will also be their last budget as the government’s term ends May 31. The PML-N, like all the other parties, is making all out efforts to project a ‘pro-people’ image. The timing couldn’t be more politically correct.
On April 5, PM Shahid Khaqan Abbasi announced tax reforms. He revised income tax brackets, giving a complete tax exemption to people whose annual income is Rs1.2 million or under. Miftah Ismail focused on these reforms during an interview with SAMAA.
Ismail is the adviser to the PM on finance, revenue and economic affairs. “We gave relief to the middle class,” he said. “These people would not even evade taxes. Now, people with monthly salaries under Rs100,000 have to pay zero taxes.”
According to him, the current government has doubled its revenue as compared to the previous government of the PPP. When PPP’s term ended, the revenue was Rs1.98 trillion, he said. “This year, our revenue is Rs4 billion. We have doubled our revenue, which has enabled us to give relief to the middle class.”
What about those living in abject poverty?
Ismail said the PML-N-led government gave a 50% increment to the labour class – the minimum wage rose from Rs10,000 to Rs15,000. “During the PPP’s tenure, minimum wage was raised by just Rs2000.”
He admitted again that one simply can’t live off Rs15,000 per month. “I won’t lie, even I can’t have a budget of Rs15,000,” he said. “So we’ll try our best. But, you see, the biggest tax on the labour class is inflation. And we have brought down inflation and tax rates.”
But are the poor really benefiting from the economic growth?
The overall growth rate registered in this fiscal year was 5.79% but poverty rate was little affected. According to Ismail, this year’s growth rate is the highest in the past 13 years. But it’s not enough. “In order to make a dent in poverty, we need at least 8% growth.”
Is the next budget going to target 7% to 8% growth in GDP?
“We will definitely present that in the next budget but our mandate is coming to an end, which is why we won’t start new projects,” said Ismail. Instead, the government will allocate funds for existing projects of “national importance” such as dams and interprovincial roads.