IN just about the span of one week, Finance Minister Ishaq Dar has already offered us two different reasons why the new revenue measures just approved by the government are necessary.

Last week, while speaking before the National Assembly Standing Committee on Finance, he said the government was concerned about the trend of rising imports of luxury items and wanted to dissuade these.

He added that the State Bank of Pakistan had also expressed concern at the rising import bill. Rising imports of non-essential luxury items was, in his opinion, a damaging trend and needed to be brought under control.

Then on Tuesday, speaking to reporters after inaugurating a language and computer lab at an educational facility, he added another reason. The new revenue measures were required, he said, because of additional costs from Operation Zarb-i-Azb and the rehabilitation of internally displaced persons due to military operations.

The costs of the military operation have been an issue in the fiscal accounts for one year now, at least. Mr Dar has been speaking about extra budgetary expenditures for Operation Zarb-i-Azb since at least January, and in a handout issued in May, as well as a presentation before a Senate Standing Committee, the finance ministry had said that Rs136bn will be required in the new fiscal year to begin on July 1, 2015, for the military operation and the rehabilitation of displaced persons.

The breakdown given at the time did not fully add up. The handout had said that Rs45bn will be required for operational expenses, and Rs33bn for rehabilitation and reconstruction, which adds up to Rs78bn. It was not clear at the time where the Rs136bn figure came from.

In any case, the IMF granted a raise in the fiscal deficit target equal to 0.3pc of GDP to meet what it called “security related expenditures”.

Those numbers were programmed into the budget. Then in the eighth review of the Fund facility, the report for which was released in September, the government reported overshooting its fiscal deficit target by Rs102bn for the quarter under review, adding that the federal government took measures to contain its expenditures “despite unforeseen expenditures of PRs 53 billion on account of Zarb-i-Azb military operations, hosting of Temporarily Displaced People (TDPs)” and flood-related costs.

This is a very large amount, especially given that it is “unforeseen”. In the same letter of intent the government also says “[w]e stand ready to take additional revenue measures to attain our budget deficit target of 4.3 percent of GDP (excluding grants) in FY2015/16 (including an adjustor of 0.3 percent of GDP for critical one-off spending)”.

Given that we now have two different explanations in the public domain about what necessitated these extra revenue measures, perhaps the finance minister can do something to help us agree on which one reflects the true picture.

Published in Dawn, December 3rd, 2015