Pakistani government has a history of misrepresenting the economic facts:
Successive Pakistani governments, unfortunately, have a history of misrepresenting the financial facts and figures to both the domestic and international organizations. The worst ever and most recent example popped up during Pakistan erstwhile military dictator, General Musharraf regime when his ‘Mr. Clean’ Prime Minister, Shaukat Aziz grossly exaggerated about the GDP as well as production of the wheat crop. When both were out of their respective offices, this ‘secret’ came to the fore and the Pakistani State credibility both at home and abroad was seriously challenged. Democracy, no matter how weak, has its own merits and demerits for nation and the government respectively. Many observers believe that the PPP-led government coalition is still groping to understand the changed political and intellectual environment which it has to operate in. Now the trouble comes from the free Pakistani media that closely monitors and scrutinizes nearly all issues from the government drive on the Rental Power Plants to awarding dubious contract to a French gas company to import LNG for Pakistan. It was a media person that got the deal quashed that was agreed in the grey quarters of the Federal Ministry of Petroleum and Natural Resources.

Budget preparation is not paid much attention:
Center for Research and Security Studies (CRSS) conducted a thorough research by using both the open source and various professionals on the issue of Pakistan fiscal planning FY 2009-10 and if the government has succeeded in achieving it targets. The finding is dismal and the Pakistani government apparently seems preparing to play with words and figures to show that ‘all is well.’ An officer in Pakistan Ministry of Finance, in an interview to the CRSS, noted that: ‘we are going to be struck again by the tragedy of lapsed targets.’ It is pivotal for any country economy to have exact facts and figures about the state of its economy but the biggest tragedy of Pakistan economy is precisely the absence of credible data that the government could utilize for effective economic and financial planning for the coming years. The Federal Bureau of Statistics (FBS) is seems to be putting lots of efforts but the net result is still far below than being desirable. Independent economists asserted that they expect various amendments in the Federal Budget, which is set to be presented on June 5, within a short span of time and after it would be presented, the government would be pushed to come up with various small supplementary budgets within a few weeks. ‘The main budget document might be debated and deliberated but the supplementary or mini budgets would hardly be discussed and the National Assembly would quickly adopt them,’ a prominent legislative observer of Pakistan noted. He said that this wouldn–t be the first and unfortunately also not the last time.

The unending story of miscalculations:
A close examination of various official documents reveals that the government has fallen short of nearly Rs. 75 billion from the target of its tax collection. The target was Rs. 1,280 billion while the actual achievement as of May 31, 2010 was Rs. 1,180. Reason that the government cites is one of its favorite ones: because of the regional situation, the tax collection has fallen short of its target. This is not the end of the story but just a beginning. The budget document estimated a direct tax collection of Rs. 496 billion while total collection stood at Rs. 461 billion. Government anticipated an income of Rs. 6.4 billion from the Postal Services and Telecom Authority but the total income on the last day of May 2010 is Rs. 160 million only. On various governmental investments, dividends of Rs. 82 billion were anticipated while Rs. 65 billion were collected. The classic example came from government anticipation of earning Rs. 3.5 billion from Workers– Welfare Fund while this particular head failed to generate a single rupee!

Likewise, the officialdom estimates on the income from Pakistan Investment Bonds were Rs. 50 billion but given the state of politics and law and order in Pakistan pushed most investors to cash their purchases. This enchashment resulted in government rather paying Rs. 10 billion extra. Another old tactic of the government to generate money is the issuance of Prize Bonds for the Pakistanis. Government expected an income of Rs. 20 billion but the estimate fell short by Rs. 11 billion and the total sales recorded were Rs. 9 billion only. The ever-popular Defense Saving Certificates (DSC) also registered a dismal performance. The Central Directorate of National Savings anticipated a total income of Rs. 14 billion but mainly because of the inflation and government poor economic policies, people rather rushed to cash the already-purchased bonds and the government had to pay Rs. 25.3 billion to the public.

The situation with government estimates on income from selling the commercial paper is perhaps the worst of all examples. The officialdom estimated an income of Rs. 40 billion but no money was generated from this head.

…Miscalculations continue with international donors also:
All the above talks about the mismanagement and wrong estimation to generate income from the domestic sources. The situation of wrong estimates is not much different when it comes to calculating the actual response of the international donors on various projects and schemes in Pakistan. For example, the government expected a total loan/grant of Rs. 3.15 billion from the Asian Development Bank for Balochistan alone but the total money received for the province is Rs. 960 million only. Likewise, Punjab expected an assistance of Rs. 6.67 billion but it ended up with Rs. 5.3 billion instead.

The plain failures discussed above speak volumes about the ‘actual ability and competence’ of the government financial managers. Nearly the same team and ‘experts’ have probably already prepared the one of the most important Parliamentary Documents i.e. Federal Budget that would be debated in the parliament for 16 days, according to a National Assembly official, and would most probably be passed with little or no amendments. After its ‘final approval,’ the process of its reviewing and re-estimations would begin in the closed-door rooms of the Planning Commission of Pakistan and the Ministry of Finance, the parliamentary observer noted.

The way forward and out of the crisis:
Pakistan state of economy demands that the public representatives exhibit a grater serious attitude toward their national responsibility of preparing and overseeing the economic and fiscal planning for their country. Pakistan never needed a more solid economic management in the past that it needs now. Both the Legislative and Executive need to demonstrate their expertise and seriousness in driving Pakistan economy out of the woods. Chances are that if the present PPP government failed to lead the process of Pakistan economic stabilization, the voters would punish the party in the coming elections and perhaps Bhutto ghost wouldn–t help the party reclaiming the office for a long time to come.