The Government of Pakistan has proposed to cut down the 50% increase given in Budget 2010-11; to the government employees by half. So far this has been proposed for next six months. PML – N has given its consent for this proposed act if the government decides to cut the salary of President and other officials as well.

This act of government can rightly be considered as an example of bad planning like many other examples of taking step at one time and rolling back at the next. It might be deceiving act as at the time of announcement of budget the GOP had attempted to gain popularity by announcing 50% increase and then at the actual implementation time cutting it short to 25%.

The Government is not taking steps to increase its revenue hand or cutting short its running expenditures; instead it is focusing on meeting expenditures by stopping development expenditures and thru’ borrowings from SBP and Commercial sector. Implementation of RGST and other steps proposed by IMF are to be met for acquiring further aid in future. Official sources further indicated the reduction in assistance to Pakistan Railway from 30 billion to 20 billion rupees. The Government officials has also informed PML-N that implementation of RGST, Flood income tax surcharge, increase in Special excise duty from 1% to 2% are some steps taken along with the implementation of 10 points agenda of PML-N. The Government has also expressed its determination to keep the budget deficit within the targeted 4.7% of GDP in the ongoing year.

All we can hope that these steps would help improving the economy of the country. But in our opinion GOP should focusing on developing the heavy mechanical industry which is considered rightly the back bone of any economy.

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