1] WHICH COMMODITIES WILL GET EXPENSIVE FOLLOWING THE “ MINI BUDGET “ AND HOW WILL IT IMPACT THE ECONOMY OF PAKISTAN IN FUTURE:
On 23rd January 2019, the Federal Government of Pakistan unveiled its second mini-budget in just five months to tackle the ongoing economic crisis. The budget was approved by the Parliament and will come into effect from 1st February 2019. The budget comprises of measures to increase revenue, reduce government expenditure, and enhance economic growth. However, it also contains certain measures that may lead to an increase in the prices of essential commodities, which could impact the economy of Pakistan.
One of the significant impacts of the mini-budget is the increase in the prices of various commodities, including oil, gas, cigarettes, and cars. The Government has increased the General Sales Tax (GST) on cigarettes from 65% to 100%, which will result in an increase in the prices of cigarettes. Similarly, the GST on cars has been increased from 10% to 20%, which means that the prices of cars will also increase.
Moreover, the Government has also increased the Gas Infrastructure Development Cess (GIDC) on gas, which is expected to lead to an increase in the prices of natural gas, fertilizer, and other products that use gas as an input. The Government has also increased the Petroleum Levy on diesel and petrol by Rs. 4 per liter, which is expected to result in an increase in the prices of diesel and petrol.
Furthermore, the mini-budget has also imposed a regulatory duty on the import of various luxury items, including perfumes, cosmetics, and expensive watches. The Government has also imposed a tax on the import of mobile phones worth more than $30, which will lead to an increase in the prices of expensive mobile phones.
The increase in the prices of these essential commodities is likely to have a significant impact on the economy of Pakistan. It will increase the cost of living for ordinary citizens, which will reduce their purchasing power and affect their standard of living. The increase in the prices of petroleum products will lead to an increase in the cost of transportation, which will affect the prices of goods and services. This, in turn, will lead to inflation, which will reduce the overall purchasing power of citizens.
Moreover, the increase in the prices of luxury items will lead to a decline in their demand, which will negatively affect the import of such items. It will reduce the revenue of the Government, as the tax on the import of such items is a significant source of revenue for the Government.
In conclusion, the mini-budget contains measures that are aimed at enhancing the economic growth of Pakistan. However, the increase in the prices of essential commodities may have a negative impact on the economy in the short term. The Government needs to implement policies that will reduce the impact of such measures on the cost of living of ordinary citizens, while also increasing revenue and enhancing economic growth. Only then, will the economy of Pakistan be able to recover and prosper in the long run.