Austerity: Digital and otherwise

On June 10, Finance Minister Muhammad Aurangzeb stood before parliament and unveiled the fiscal budget for 2025–2026.

Around him: chants, jeers and hand-flinging parliamentarians reenacting a circus. But the minister remained unbothered — like a white protagonist in a horror film, calmly proceeding while the ghost creeps ever closer.

Though much of his speech was drowned out, the message was clear: this is a budget aimed at "stabilization". That word again. The soft-spoken cousin of austerity. However, unlike many of its predecessors, this budget does not deserve to be completely torched. In fact, parts of it feel almost reasonable. Rational, even. There are signs — however faint — that someone, somewhere in the finance ministry may have looked up from the Excel sheet long enough to remember that budgets are not mere accounting exercises, but moral documents that reveal, line by line, who a state chooses to protect, and who it’s willing to forget.

So yes, let’s give credit where it’s due: a first-time 50 million grant to the Autism Society of Pakistan, two billion to the Access to Justice Fund, and 200 million for technical and vocational training. These are not flashy numbers, but they are thoughtful ones aimed at stitching together the torn edges of a fraying social fabric.

And yet, it is in the quiet omissions, in the tense pauses between numbers, that this budget whispers its contradictions.

Take, for instance, the prime minister’s early morning vow delivered just hours before the budget was unveiled to “use all-out resources” to reduce the financial burden on the poor and middle class. Stirring words, certainly. But somewhere between the speech and the spreadsheet, that promise appears to have taken a wrong turn.

Yes, tax slabs for salaried individuals were adjusted in ways that slightly favour the middle class. Government employees got a 10% pay bump; pensioners a 7% raise; and conveyance allowances for persons with disabilities were also increased. All well and good, but only if you happen to be on the government payroll.

But for the nearly 40% of Pakistan’s workforce who earn minimum wage? The silence is deafening.

Despite inflation biting harder than ever, the minimum wage, last revised in the 2024–25 budget, remains frozen at Rs37,000 per month. No adjustment. No explanation. No mention at all. As if the country’s lowest earners, the ones who build its cities, drive its economy and serve its elites, have somehow achieved immunity from inflation. If not, then the promise to protect the ‘salaried class’ remains just that and the definition of ‘salaried’ no longer includes those who are salaried at minimum wage.

Meanwhile, countries like the UK, Germany, France, Australia and Japan review their minimum wages annually, adjusting them in line with inflation. Even where economic growth is sluggish, governments make a show of recalibrating wage floors. But in Pakistan, the poor remain politely off the budgetary radar — grateful, perhaps, that they’re not taxed for breathing.

Then there’s the matter of the digital economy or what’s left of it after this budget gave it a regulatory slap across the face.

Only two weeks before budget day, the finance minister stood before journalists and declared, with technocratic optimism, that Pakistan was moving toward a compulsory digital payments regime. Less cash, more transparency. More fintech, less tax evasion. A vision, finally.

And yet, when the budget dropped, so did the ball. Rather than incentivising digital payments, let's say by lowering sales tax on card-based transactions or penalising cash-heavy purchases, the government instead decided to slap an 18% sales tax on e-commerce transactions. In other words, the very platforms that have enabled entrepreneurship in cities and small towns alike are now being treated like luxury goods.

If this is how we nurture startups, perhaps we should also tax ambition next. It’s almost as if someone in the finance industry did not like Shark Tank and decided to tank the startups collectively altogether.

To add injury to irony, the Federal Board of Revenue is now seeking police-like powers: the authority to raid businesses, seize records and arrest taxpayers without warrant powers that would make even an SHO blush. At a time when Pakistan needs a citizen-friendly tax culture, we’re veering toward tax authoritarianism. The digital economy didn’t need a push; it needed protection. Instead, it’s regulated like a threat and taxed like a vice.

And then comes the green elephant in the room. Climate change.

Earlier this year, Prime Minister’s Coordinator on Climate Change Romina Khurshid Alam issued a solemn warning. Pakistan, she said, needed urgent climate risk management across federal, provincial, and district levels. The stakes, she rightly noted, were existential: more floods, more droughts, more displacement. This country, after all, is not waiting for climate catastrophe, it is living through it.

So what did the budget offer in return? A 47% cut to the Climate Change Division’s budget, down from Rs5.2 billion to Rs2.7 billion. The disaster management fund? Also reduced by over 17%, from Rs60.8 billion to Rs50.1 billion.

This, mind you, in the same week that the Pakistan Economic Survey rang alarm bells about environmental degradation, glacier melt and rising heatwaves. We are, quite literally, budgeting for the apocalypse with pocket change.

To be clear: this is not an anti-budget screed. There is much here that shows promise. The stabilisation narrative, after all, was inevitable and in many places, even responsibly handled. But progress cannot come at the cost of those who have the least voice in these decisions: the minimum wage worker, the online seller, the climate migrant.

This budget could have done more. It still can. Because what it gets wrong isn’t just economic policy. It is a moral priority. Pakistan doesn’t need a perfect budget. It just needs one that remembers the people who weren’t in the room when it was being written.

Ultimately, this isn’t a takedown. This is a nudge. A reminder that while the federal budget sets the tone, the real symphony will be conducted by the provinces.

The hope is that the minimum wage will still be revised in the days ahead, that the provinces will follow through with meaningful action on their own budgets, and that they’ll step up to creating real incentives for digital payments instead of waiting for the next tax wave to crash.

At least Maryam Nawaz’s Punjab appears to be marching towards digitisation with some intent. Whether others follow suit, and whether climate resilience, wage justice, or tech inclusion become provincial priority, remains to be seen. The stage is set. Now it’s a matter of who shows up to perform.

The writer is a lawyer.

Disclaimer: The viewpoints expressed in this piece are the writer's own and don't necessarily reflect Geo.tv's editorial policy.

Originally published in The News