WHICH COMMODITIES WILL GWT BE 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 measures to increase revenue,
reduce government expenditure, and enhance economic growth. However, it also contains specific
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 litre, 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, reducing citizens’ overall purchasing power.
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 income 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?