The key to life is accepting challenges. Once someone stops doing this, he's dead." –Bette Davis

Economic repercussions of budgetary options

The most challenging local and international conditions now exist. Geopolitical imperatives and global economic conditions are not beneficial. The flood losses from 2022 have not yet been recovered. Security risks are rising once more. Political fragmentation and inter-institutional conflict are at their height. Living standards and per capita incomes have drastically declined. In light of this, we must carefully consider the effects of the two primary possibilities for this year's budget formulation. Offering fiscal stimulus in the pretext of helping the "common man" has historically been the first course of action taken in every election year. The stimulus is unworkable in the context of a debt to GDP ratio of 100% and debt payment consuming approximately 80% to 90% of revenues. The budget would have to endure an enormous burden if the prices of power, petroleum products, gas, fertilisers, and food are kept below their scarcity value. We ought to draw lessons from the recent past. In 2008, the caretaker administration failed to pass on to customers the growing costs of food and fuel at the international level, forcing the PPP-led administration to request a bailout from the IMF. Similar to 2013, when a decline in fiscal and external indicators compelled the PML-N administration to request financial support from the IMF. The Benazir Income Support Programme (BISP), which has proven reliable (National Socio Economic Survey, biometric identification, access to bank accounts for the recipients), is the more efficient mechanism for targeting subsidies on the poor and low middle income categories. Leakages are kept to a minimum, and targeting success is high. The targeted subsidies would almost halve the budgetary allotment for subsidies, make industrial consumers' energy prices competitive in their regions since domestic consumers wouldn't be subsidised, and increase the productivity of crops like wheat, cotton, and pulses by encouraging small farmers to use more fertiliser.

Mina Noman,
Karachi

Causes of devaluation of Pakistani currency

The low-income population has been severely hurt by the rise in prices of necessities brought on by the depreciation of the Pakistani rupee. For many people, the expense of life is becoming intolerable. The nation's current account deficit is one of the key causes of the currency depreciation. The imbalanced commerce of Pakistan is one of the key causes of the devaluation of the rupee. Pakistan exports substantially less goods and services than it imports, which results in a sizable outflow of foreign money. The Pakistani rupee experiences downward pressure due to this trade imbalance because the nation needs more dollars to pay for imports than it generates from exports. Political unrest in Pakistan is another aspect that has contributed to the devaluation of the rupee. Foreign investors may lose trust and remove their money from the country if they are uncertain about the political future of the nation. As a result, the value of the Pakistani rupee may decrease as the demand for the currency declines. The devaluation of the Pakistani rupee is also influenced by inflation. The Pakistani rupee's worth against the US dollar decreases when the cost of goods and services rises throughout the nation. This is due to the currency's declining purchasing power, which makes it less useful in the global economy. To close this deficit, the government must concentrate on boosting exports while lowering imports. The central bank should also implement policies to stabilise the exchange rate and rein down inflation. Economic recovery can be greatly aided by political stability. To resurrect industrial activity and stable the Pakistani currency, the political leadership must deal with sociopolitical issues and collaborate with other stakeholders.

Sami Bashir,
Lahore