Pakistan government to present mini-budget in Senate today

Pakistan's finance minister Shaukat Tarin presents federal budget for fiscal year 2021-22 at the National Assembly in Islamabad, Pakistan, on June 11, 2021. (Photo courtesy: Finance Ministry)
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Updated 04 January 2022
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Pakistan government to present mini-budget in Senate today

  • Bill ends tax exemptions on nearly 150 items as prior action for revival of $6 billion IMF loan program
  • Opposition lawmakers and economists say the document is anti-growth and will trigger inflation

ISLAMABAD: Pakistan’s finance minister Shaukat Tarin will present a contentious supplementary finance bill, popularly known as the ‘mini budget,’ before the Senate today, Tuesday, amid warnings by opposition lawmakers and economists that the measures it introduces are anti-growth and will trigger inflation.

The bill was presented in the lower house of parliament last week and aims to end tax exemptions on nearly 150 items as a prior action for the revival of a $6 billion loan program from the International Monetary Fund (IMF).  Opposition politicians and economic experts say the new measures will usher in a new wave of inflation, which the government denies. 

According to a 16-point agenda issued by the Senate Secretariat on Monday, Finance Minister Shaukat Tarin will “lay before the Senate a copy of the money bill, the Finance (Supplementary) Bill, 2021, and move that the Senate may make recommendations, if any, to the National Assembly on the bill under Article 73 of the Constitution,” Pakistan’s Dawn newspaper reported. 

Meanwhile, Shehbaz Sharif, the current leader of the opposition in the National Assembly, has described the mini budget as a “death-knell” for the country while Bilawal Bhutto-Zardari, the leader of the major opposition party, the Pakistan Peoples Party, has called it an “anti-public budget.”

The new finance bill will empower the government to level a uniform 17 percent General Sales Tax (GST) on goods that were taxed at 5% or 12% rates. The amendment will also enable the government to generate over Rs343 billion in additional revenue. 

The measures Pakistan has agreed to meet for the IMF would have a monetary impact of around Rs600 billion, including around Rs350 billion through tax exemption withdrawals and new tax imposition, Rs200 billion through cuts in development funds, and Rs50 billion through other adjustments.

Apart from the tax exemption withdrawals, the mini-budget also proposes the imposition of new taxes on sectors which were earlier zero-rated.

The government has rejected the opposition’s fears of the mini-budget causing more inflation in Pakistan. Finance minister Shaukat Tarin has said new taxes worth only Rs2 billion were being imposed, which would not lead to widespread inflationary pressures.

Passing the mini-budget is not the only action the government has to take for the revival of the IMF program. The international money lender wants the government to grant complete autonomy to the State Bank of Pakistan (SBP) via amendments to the State Bank of Pakistan (SBP) Amendment Bill 2021.

The executive board of the IMF will meet on January 12, 2022, to decide if it will revive the stalled loan package for Pakistan, approved in 2019 to rein in mounting debts and stave off a looming balance of payments crisis, in exchange for tough austerity measures.


Tirah Valley residents flee homes ahead of Pakistan’s planned anti-militant army offensive

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Tirah Valley residents flee homes ahead of Pakistan’s planned anti-militant army offensive

  • Families flee militant-hit region on days-long journeys amid bitter winter cold
  • Cash aid announced but displaced residents cite lack of evacuation planning

PAINDA CHEENA, Pakistan: In the rugged mountains of Pakistan’s Tirah Valley, long lines of tractor-trolleys and mini-pickups inched toward a registration camp earlier this month. 

The vehicles were stacked with bedding, food supplies and families escaping their homes as a military operation against militants looms in the conflict-striken northwestern region. 

At the Painda Cheena registration point, 60-year-old Hajji Muhammad Yousuf sat wrapped in a shawl, waiting with dozens of others after traveling nearly 40 kilometers from his village in Maidan Tirah, a journey that took four days instead of the usual few hours. He still faces another 66-kilometer trip to Bara, near the northwestern city of Peshawar, the provincial capital of Khyber Pakhtunkhwa. 

Like thousands of others, Yousuf is leaving behind a fully furnished home ahead of an expected security offensive in the volatile border region near Afghanistan.

“Today is our fourth night here,” Yousuf said. “We have left fully furnished houses behind ... There are no facilities, no amenities for us. We are facing great hardships.”

Families load their belongings onto vehicles in Pakistan’s Tirah Valley on January 15, 2026. (AN photo)

Officials say the evacuation could affect up to 20,000 families, marking a significant escalation in Pakistan’s campaign against the proscribed militant group Tehreek-e-Taliban Pakistan (TTP). Despite major military operations in the mid-2010s, Tirah Valley has remained a stronghold for insurgents, prompting authorities to plan what they describe as a targeted clearance.

The scale of displacement has placed acute pressure on limited local infrastructure. While the journey from Maidan Tirah to the registration point at Mandi Kas normally takes around two hours by vehicle, congestion and verification procedures have stretched the trip into days for many families.

“Last night, a woman died of hunger in Sandana,” Yousuf said. “There is no arrangement for medicine, no doctor, no food, no washroom. Women and children are facing problems.”

Displaced residents say they feel trapped between militant threats and state action.

“We ourselves are opposing terrorism, yet we do not understand why, if a Taliban comes in the evening and we give bread, the government comes in the morning asking why the bread was given,” Yousuf said. “In the end, we were forced to do this [to leave].”

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The Khyber Pakhtunkhwa (KP) provincial government has announced a compensation package for displaced families. Talha Rafi, assistant commissioner for Bara, said authorities had set up 15 biometric counters at the registration site.

“One person receives a one-time compensation of Rs255,000 ($911), and a monthly Rs50,000 ($179) is provided,” he said, adding that SIM cards were being issued to ensure digital disbursement of funds.

Families load their belongings onto vehicles in Pakistan’s Tirah Valley on January 15, 2026. (AN photo)

Provincial officials say the payments are intended to cover basic needs during displacement, though residents and tribal elders argue that cash alone cannot offset the absence of shelter, health care and transport arrangements during evacuation.

The evacuation has also exposed tensions between the provincial government and Pakistan’s military establishment over the use of force in the region.

“We have neither allowed the operation nor will we ever allow the operation,” KP Law Minister Aftab Alam Afridi said, arguing that past military campaigns had failed to deliver lasting stability.

“These people are our own people. They are also the people of this state, the people of this province. We will definitely take care of them,” he said, adding that the KP cabinet had approved what he described as “a large package” for the displaced families.

Federal authorities and the military have signaled a firmer stance. While Federal Information Minister Ataullah Tarar and the military’s public relations wing did not respond to requests for comment, military spokesperson Lt. Gen. Ahmed Shareef Chaudhry has previously defended security operations as necessary.

Families sittinng in vehicles with their belongings in Pakistan’s Tirah Valley on January 15, 2026. (AN photo)

In a recent briefing, Chaudhry said security forces carried out 75,175 intelligence-based operations nationwide last year, including more than 14,000 in Khyber Pakhtunkhwa, attributing the surge in violence to what he described as a “politically conducive environment” for militants.

Analysts say political divisions have allowed the TTP to regain ground. 

Peshawar-based journalist Mehmood Jan Babar said many militants now operating in Tirah are local residents who returned after refusing settlement offers in remote parts of Afghanistan.

“Whenever we have seen division at the national level, the Taliban have taken advantage of it,” he said.

But for families waiting in freezing conditions at Painda Cheena, such strategic calculations offer little comfort. Tribal elders accuse civil authorities of ordering displacement without adequate logistical planning.

“The government has, without any administrative arrangements, ordered these people to migrate,” said Muhammad Khan Afridi, an elderly local resident. “You yourselves are seeing what suffering these people are facing, what humiliation they are experiencing.”

As a January 25 evacuation deadline approaches, uncertainty dominates daily life for those uprooted.

“Bringing peace is in the government’s hands,” Yousuf said. “It is up to them whether they normalize the situation or drive us out again tomorrow.”