New Delhi: Pakistan’s successive governments, both civil and military, have been imposing higher and regressive taxes, pushing the overwhelming majority of citizens towards an unbearably high cost of living, and adding insult to injury, the state provides nothing in terms of welfare and has total apathy towards the economically vulnerable segments of society, an article in the Pakistani media said. 

Pakistan’s fiscal crisis is not simply about deficits and numbers. It is about a broken social contract—a growing disconnect between what citizens pay and what they receive. High taxation without welfare delivery has not only failed to generate effective revenue but also has eroded trust, discouraged investment, and weakened the formal economy, the article in the Lahore-based The Friday Times lamented.

Pakistan’s growth failure is often explained through familiar cliches: low productivity, weak exports, lack of innovation, or insufficient entrepreneurship. These are symptoms, not causes. The real problem lies deeper—in a state-engineered cost structure that has made doing business prohibitively expensive and structurally irrational, it said.

The article cites a recent private sector analysis reported by Nikkei Asia, which has quantified what businesses have been saying for years: operating a business in Pakistan is 34 per cent more expensive than in comparable South Asian economies. According to the study conducted by the Pakistan Business Forum (PBF), the excess cost is not incidental or cyclical. It is structural, cumulative, and policy-induced.

“With only 3.4 million effective taxpayers, a mere 4 per cent of the 85.6 million-strong workforce funding the entire state, we have declared war on the middle class. Having forced this captive minority to bridge a multi-trillion rupee deficit while the informal elite remain untouched, we have classified excellence as a taxable offence and transparency as a path to insolvency, the article states,” the article said.

The tragedy is not that Pakistan collects too little (which is a myth in terms of the tax-to-GDP ratio in our peculiar milieu), it is that it taxes irrationally—high taxes on a narrow tax base with low yield and tax expenditure of nearly Rs 5 trillion. Despite successive mini-budgets, super taxes, levies on petroleum, enhanced withholding regimes, and expanded presumptive taxation, the debt-to-tax ratio remains shocking, over 700 per cent, it noted

A microscopic segment of the population — salaried individuals, documented businesses, corporate entities, and compliant exporters — finances a bloated public apparatus. The informal economy thrives, retail and wholesale sectors remain largely undocumented, agriculture as a sector is scarcely taxed, and real estate speculation continues under preferential regimes. Instead of broadening the base, fiscal managers repeatedly resort to increasing rates on the already documented, it added.

New Delhi: The Haryana Government on Sunday de-empanelled IDFC First Bank and AU Small Finance Bank from handling government business with immediate effect after an alleged fraud of around Rs 590 crore came to light. 

In an official circular, the state government said both banks have been barred from carrying out any government-related transactions in Haryana until further orders.

It directed all departments, boards, corporations and public sector undertakings to stop using these banks for deposits, investments or any other financial dealings.

Authorities have also been asked to immediately transfer existing balances and close accounts maintained with the two lenders.

The Finance Department pointed out lapses in following fixed deposit instructions. It noted that in some cases, funds that were supposed to be placed in flexible deposits or higher-interest fixed deposit schemes were allegedly kept in savings accounts, leading to lower returns and financial loss to the state.

Departments have been instructed to strictly follow approved deposit terms, regularly verify compliance by banks, conduct monthly reconciliations and report any discrepancies.

All reconciliations must be completed by March 31, 2026, and a certified compliance report has to be submitted by April 4, 2026.

The action comes after IDFC First Bank disclosed in a regulatory filing that it had detected a fraud of about Rs 590 crore involving certain Haryana government-linked accounts operated through its Chandigarh branch.

The bank said there were prima facie unauthorised and fraudulent activities carried out by some employees at the branch, possibly involving other individuals or entities.

According to the bank, the issue surfaced when a Haryana government department requested closure and transfer of its account balance to another bank.

During the process, discrepancies were found between the amount mentioned and the actual balance in the account.

Similar discrepancies were later identified in other government-linked accounts from February 18 onwards.

IDFC First Bank clarified that its preliminary internal review suggests the matter is limited to a specific group of Haryana government-linked accounts handled by the Chandigarh branch and does not affect other customers.

The total amount under reconciliation across the identified accounts is estimated at around Rs 590 crore, and the final figure will be determined after further validation and possible recoveries.

Four bank officials have been suspended pending investigation. The bank said it will take strict disciplinary, civil and criminal action against those found responsible.

It has also issued recall requests to certain beneficiary banks to lien-mark balances in suspicious accounts as part of recovery efforts. The statutory auditors have been informed and an independent external agency will carry out a forensic audit.