Financial discipline is the fulcrum of economy and when it is ignored, the economy goes into disarray. It is still debatable why the country could not devise a mechanism to manage its finances, trade, investment and the overall economy. Why the official machinery is unable to establish coordination among its various wings and who the people responsible for economic policies are. In the absence of an effective accountability mechanism, the corrupt government officials and public representatives walk free after incurring heavy losses on the national economy. There is an army of technocrats, policymakers and parasites who depend heavily on the national reserves, but their utility is limited and ability is questionable. Living on perks and collecting hefty salaries, most of the official breed is useless for the fifth largest nation of the world. The only option left for the nation is to seek loans, further loans and heavy loans on unspecified conditions. A lion share of the national income is likely to go on debt servicing in coming years and still the financial discipline is absent in the government dictionary.
According to reports, the World Bank has suspended a budgetary support programme due to deteriorating macroeconomic indicators in the country, but will continue to finance the development projects.The bank has decided this after receiving a letter of comfort from the International Monetary Fund and the move shows how the world lending agencies are in coordination with each other. The fund is already monitoring financial situation of the country on the basis of macroeconomic indicators. The economists believe the government will have to enter into another loan programme with International Monetary Fund and the situation reflects inherent vulnerabilities in the national economy.
Reports suggest the foreign currency reserves of the country have started depleting due to current account deficit and major chunk of the national income already goes to the debt servicing. The government, which was proud of foreign exchange reserves for touching the psychological barrier of $22 billion, stand at $14.7billion. In the wake of $4billion forward booking, the net reserves will nearly stay at $10billion which are hardly enough to meet the import bill requirements of the next three months.There is only one option for the financial managers and that is to boost revenue within the country not on the basis of unreasonable taxes and tariffs, but on the basis of industrial production. Still the government has failed to improve macroeconomic balances and streamline the tax collection system.
