M. Nadeem Sarwar

NU FAST Islamabad | RASTA Fellow | IBA Karachi | Behavioral Economics | Public Finance | Poetry and Music Lover.

[M. Nadeem Sarwar @fmnadeem]

جنت میرے نصیب کی واعظ کو بخش دے
میرے کفن میں گیسوئے جاناں کی بْو رہے ۔۔۔
(آمین)

[Zehra Farooq @ZehraFarooq]

On January 20, 2022, Pakistan's GDP grew by Rs 8.1 trillion overnight. Not a single factory opened. Not a single additional tax was collected. Public debt, frozen at Rs 39.9 trillion, did not change by a single rupee. But the debt-to-GDP ratio fell from 83.5% to 71.8%, instantly.

This is a thread about the institution behind that number, and why it urgently needs to be better funded. 🧵

[M. Nadeem Sarwar @fmnadeem]

@ZehraFarooq Thanks for putting it very solid

[M. Nadeem Sarwar @fmnadeem]

If we continue treating structural & behavioral problems as purely technical, reforms will remain partial and trust will remain fragile.

[M. Nadeem Sarwar @fmnadeem]

🧵 1/ Reflections on 🇵🇰’s Economy and the Research Agenda:

On going economic situation does not seem like a routine cyclical downturn. Instead, it increasingly reflects an erosion of trust in institutions, policies, & the state–citizen relationship.

[M. Nadeem Sarwar @fmnadeem]

This raises critical Qs:
• Can better policy design shift citizen behavior?
• How do institutions build or lose credibility?
• How do norms & beliefs shape economic outcomes?

🇵🇰 doesn't lack data, it lacks interpretation grounded in its own realities.

[M. Nadeem Sarwar @fmnadeem]

@salmanAraja @MuzzammilAslam3 Any protect?

[M. Nadeem Sarwar @fmnadeem]

@PTIofficial Victory speech ...???

[M. Nadeem Sarwar @fmnadeem]

@AliHasanain Moreover, do we really need those projects 'under historic PSDP' , post 18th amendment?

[M. Nadeem Sarwar @fmnadeem]

The story is same for Islamabad Club, anf Sindh club etc. The GOR facilities are very much subsidized ...

[Asad Ali Toor @AsadAToor]

🚨🚨
For the main estate, the club pays Rs5000 a year in rent. Not per kanal. In total. That comes to Rs417 a month, or under fifty paisas per kanal, for some of the most valuable earth in Pakistan. How little is Rs5000? Consider it against the government’s upper commercial rate. The land is worth Rs218 billion so fair rent would be about Rs4.36 billion a year. Under the government’s 2023 policy, clubs can pay a tenth of market rent, but this would still come to Rs400 million a year. The club pays Rs5000.
https://t.co/8X2H8oF3VM

[M. Nadeem Sarwar @fmnadeem]

@EconomistAadil @TheGentleman1o1 @IMFNews I believe struggling not with a lack of capacity, but with a lack of interest n will. The capacity can be built, we have a bunch of good economists who can b included in the panel to deal with IMF, lead reforms & make policies. We also hv some literature & research to start with

[Dr. Khaqan Hassan Najeeb @KhaqanNajeeb]

Pakistan’s Budget FY27 should not begin with the question: how much more revenue can be extracted?

It should begin with a fundamental question: what kind of economic incentives is the fiscal system creating?

A new fiscal model requires a new mindset:

- Shift from *revenue extraction to investment, productivity, and competitiveness-led taxation*
- Broaden the tax base instead of burdening compliant sectors
- *Tax profitability and wealth creation, not transactions and documentation*
- *Reduce dependence on withholding, presumptive, and turnover-based taxation*
- Rationalize super taxes and distortionary corporate levies
- Simplify and harmonize GST to lower compliance costs
- *Reward formalization instead of penalizing documented businesses*
- Create a stable tax regime with faster refunds and lower litigation
- *Use digitization, data integration, and risk-based compliance instead of** indiscriminate enforcement
- Reduce reliance on petroleum levies and electricity-based extraction
- *Advance provincial reforms in agricultural income, land valuation, and property taxation*
- Redirect expenditure toward infrastructure, exports, technology, and human capital
- Rationalize inefficient subsidies and non-productive expenditure
- Strengthen tax morale through transparency, fairness, and better public service delivery

_Ultimately, sustainable fiscal consolidation cannot come from *compressing economic activity year after year.* It must come from *expanding the productive economy, improving competitiveness, encouraging sclae, strengthening formalization,* and restoring investor confidence._

https://t.co/QFqB5YCuhU

[M. Nadeem Sarwar @fmnadeem]

* An announcement for empowered local/city Govts wid clear timelines. Health, Edu n Cleanliness budgets (& hiring firing etc.) to b devolved to local Govts.

* An announcement of evaluation of recent Pvt. measures in health n education (in Pun, not sure abt othr provinces).

[M. Nadeem Sarwar @fmnadeem]

As the announcement of fed & prov budgets r around the corner, let me share my thoughts for a transformative #budget:

* An announcement of slashing all kinds of tax rates, reduction in No of tax brackets for individual income tax, & no discrimination in income based on source.

[M. Nadeem Sarwar @fmnadeem]

* Same for tax exemptions, tax credits, favorable tax rates etc.

* End to perks n discretionary funds, all salaries monetized.

* An announcement tht any change in any expenditure head, or income will be discussed n approved by parliament.

[Kashif Mateen Ansari @kashifmateenpk]

Pakistan doesn’t have a tax system. It has a punishment system.

It punishes the salaried, the documented, the consumer, the electricity user and the petrol buyer; while privilege negotiates, litigates and escapes.

That is not revenue mobilisation.
That is fiscal injustice.

1/4

[M. Nadeem Sarwar @fmnadeem]

@Sh_am_92 @Fizaalam_93 خان صاحب سے ملاقات تو ہی نہیں رہی تو ان کی اجازت یا مشاورت کیسے لی جاسکتی ہے؟

[M. Nadeem Sarwar @fmnadeem]

C) Higher democratic accountability and Govt stability are shown to suppress procyclical actions.

Also happy to share that this was Accepted without Any Changes.

Download, read and comment (Free access till 50 days:) https://t.co/qsKohzPTkP

[M. Nadeem Sarwar @fmnadeem]

Pleased to share our study "From boom to bust: The perils of pro-cyclicality in fiscal policy in Pakistan" published in Journal of Policy Modeling.

This study, authored with @ShabbarShagufta & @ZeeHashim, asks:
a) is 🇵🇰’s fiscal policy (FP) pro-, a-, or counter-cyclical; b)

[M. Nadeem Sarwar @fmnadeem]

being on IMF's prog consistently, scarcity of research on such topic, as compared to other such economiss, e.g. 🇦🇷

*Key Findings*
a) Pak’s FP is procyclical.
b) FP shocks generate a brief spurt of growth, followed by ⬆️ inflation, ex rate depreciation & pub debt accumulation.