Published : Friday, 30 April, 2021 at 12:00 AM Count : 756
As the country keeps passing through testing times of the pandemic's second wave - the government decided to cut luxury spending in its upcoming budget (2021-2022) - saving government money to protect the economy from the damages inflicted by the novel Coronavirus. We welcome our economic policy makers to take a well-timed and prudent decision to refrain from lavishness in the time of a global health crisis. Also we won't be surprised if there is a third, fourth and a fifth wave of the pandemic in the offing.
However, by cutting on luxury costs the aim now is to increase the coverage of social security and create employment. Rather pleasantly, the decision to cut on luxury spending comes at the right time, not as an austerity measure, but to save and be used more efficiently.
Visits by government officials abroad, undertaking relatively unnecessary projects and refraining from investing in any new infrastructure development have been discouraged under the new scheme. But unless bureaucrats, politicians and policy makers together shun the extravagant habit of luxury spending, we fear the latest move to discourage it won't deliver the expected outcome.
Moreover, the Finance Ministry is also formulating a business-friendly budget with tax breaks to keep the economy afloat. Simultaneously, Policy assistance must be provided to investors to continue production and export activities by keeping export oriented industries in operation.
Now that the government is undertaking all possible measures to tackle potential economic fallout, make optimal use of allocated funds, and put off lavish expenditures - it is also important to prevent unwarranted excessive costs incurred by the ongoing massive development projects.
In particular, the government must take stock of its numerable futile ADP projects (Annual Development Project). Thousands of crores are spent on these inconclusive and utopian projects every year. There are also allegations that many of these projects have been included in the ADP on political consideration.
While targeting increased revenue and especially since VAT and taxes are not being imposed on any new sector, the NBR will have to ensure to bring all tax eligible citizens under the tax net. Therefore, the number of taxpayers will be increased without increasing taxes.
The NBR's (National Board of Revenue) revenue collection has been under pressure since last year because of the growing incidence of Coronavirus.
We, however, believe a single isolated initiative to cut on luxury costs is not enough to expect the desired outcome; the government must focus on a more holistic approach in line with austerity measures. More to it, all government spending will have to be strictly monitored while making the spenders accountable.