Pakistan’s ruling party, key ally to hold further talks to bridge budget differences

ISLAMABAD: Pakistan’s ruling party and one of its major coalition allies, the Pakistan Peoples Party (PPP) on Thursday agreed to form committees to bridge their differences over the fiscal budget and other matters related to the allocation of development funds, the Prime Minister’s Office (PMO) said in a statement. 

Differences between the Pakistan Muslim League-Nawaz (PML-N) and the PPP parties arose last week when the government unveiled its much-awaited Rs18.877 trillion ($67.76 billion) federal budget for the fiscal year 2024-25 on Wednesday. 

The tax-heavy budget is expected to play a pivotal role in Pakistan’s negotiations with the International Monetary Fund (IMF) for a fresh financial assistance program with the global lender. The PPP alleged that the government did not take it into confidence regarding key aspects of the budget.

PPP Chairman Bilawal Bhutto-Zardari called on Prime Minister Shehbaz Sharif with a delegation of senior party leaders on Thursday to discuss the main points of contention between them, ahead of the key vote on the budget slated for next week. PPP lawmakers’ votes will be crucial for the government, without which it would not be able to pass the document. 

“All political parties have to work together for the country’s progress, prosperity and public welfare,” Sharif was quoted as saying in a handout issued by the PMO after the meeting concluded. 

The prime minister said the government has taken measures in the budget to provide relief to the common man.

“Further consultation will continue through the committees,” the statement said. 

It pointed out how Pakistan’s benchmark index rose to a historic high on Thursday, saying that it was proof that the budget had been validated by traders and investors. 

Pakistan’s benchmark share index rose 2.8 percent to a new record high on Thursday, as investors welcomed the budget since it avoided an anticipated increase in capital gains tax, despite an ambitious tax revenue target.

Pakistan’s parliament held a debate session on the budget after a hiatus of a week on Thursday. Leader of the Opposition in the National Assembly Omar Ayub described it as “economic terrorism.”

“This budget in actuality is economic terrorism against the people and the future of the country,” Ayub said. 

'RUBBER STAMP IN PARLIAMENT'

PPP lawmaker Sehar Kamran told Arab News earlier this week that the government had ignored her party in pre-budget consultations and wanted to use them as a “rubber stamp” in parliament to have the budget passed.

“Shehbaz Sharif’s government wants to use us as a rubber stamp in parliament to pass the budget, but we won’t do it if our reservations are not addressed,” Kamran said.

Kamran said the two parties also disagreed over the distribution of development funds and various projects related to Pakistan’s provinces.

The PPP, which voted Sharif into power after the contentious national election in February, is not part of the federal government but has its government in Pakistan’s southern Sindh province. 

“If the government needs our votes in parliament to pass the budget, then it will have to listen to us first to address our grievances,” she had said.