IF unofficial reports in the media are correct, then the IMF team that is in Pakistan for consultations not directly connected to any bailout has expressed its reservations about the fiscal adjustment measures taken by the government in September.

Those measures were best encapsulated by what was referred to as a ‘supplementary budget’ and the finance bill introduced by the government to amend tax measures as well as revise expenditure targets.

The IMF team echoed the views of many independent voices that the measures announced by the government are altogether too inadequate to address the scale of the fiscal adjustment they are trying to undertake, and run contrary to the impression created by the finance minister that the magnitude of the fiscal slippages is far larger than he imagined at first.

Lately, the finance minister has taken the same strident line in public remarks, saying that the scale of misreporting of economic imbalances is massive, while giving examples from the circular debt to buttress his point.

The supplementary budget was announced after weeks of internal consultation within the finance division, and the government had been saying all along that it would take up to the end of the month of September to come up with a realistic plan to address the twin deficits that plague the economy.

The amount of time that went into drawing it up raised expectations that something big and bold was on the way. Instead, what we saw were marginal adjustments and a pusillanimous revenue plan that relies on stricter enforcement actions for almost half of the incremental revenues it aims for.

Such actions are fine, but they make for poor revenue measures because they take a long time to come to fruition, as repeated recourse to them by past governments has amply demonstrated.

Now we have the Fund asking for a more credible revenue plan, as well as more action on the structural side where the finance minister has repeatedly gone on record saying that privatisation was not on the agenda of the ruling party.

True, one cannot argue that privatisation is the only way forward. But it is also important to lay out the specifics of an action plan on what to do with state-owned enterprises and their mounting losses and inefficiencies, and thus far there has been little more than broad directional pointers, with some international examples invoked — there is as yet no word on any reforms.

It is high time that the government’s finance team began delivering on an action plan and giving the country economic direction. Weak steps that are quickly backtracked on do not count as setting the right direction for the economy. The government needs to embark on its macroeconomic adjustment journey immediately.

If it continues to procrastinate, it will only signal further weakness and indecision.

Published in Dawn, October 3rd , 2018