Pakistan’s finance minister Dr. Abdul Hafiz Sheikh presented federal budget 2012-13 on June 01, 2012. The total outlay of budget 2012-13 is Rs. 3,203 billion which is 15.8% higher than the size of previous budget 2011-12. Comparison of two budgets reveals that the total government expenditures have increased by 15.20% from Rs. 2,835,373 million to Rs. 3,266,307 million out of which development expenditures have increased by 25.83% from Rs. 354,872 million to Rs. 446,539 million. According to Economic theory, if government expenditures increase, generally economy flourishes but Pakistan is an exception to the rule. In every budget, government expenditures increase but our economy is not showing any positive response. This budget has also been presented in a situation when the condition of our economy is not at a satisfactory level. Despite increase in government expenditures, Pakistan economy has been facing unemployment, acute energy crisis, inflation, poverty and trade deficit for many years.
Think as an economist and discuss the reasons why is Pakistan economy not showing any positive change despite the increase in government expenditures?
(Write "to the point" answer, avoid irrelevant or extra details.)
1. Your discussion must be based on logical facts.
2. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
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Honestly speaking this is very easy GDB.
Please keep in mind the following points when you are solving this GDB.
1. Political instability in our country
2. Energy crises
3. Law and order situation
4. Inflationary pressure
5. World bank and IMF loans
6. International influence in our economic polices.
and many other relevant points that exist in our mind regarding the bad economic condition.
"HER WAQT HAZOOR saww AUR UN KE ALHE E PAK a.s per DAROOD PARTE RAHA KARE ALLAH HAM SAB KA HAMI O NASIR HO"
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