Time has come for the incumbent coalition government to take into account difficulties of the multitude of masses before going ahead with implementing the harsh preconditions of the International Monetary Fund (IMF) and other lenders, which have already resulted in an unaffordable price hike, pushing essential commodities of life beyond their purchasing power.
The authorities need to sincerely work on controlling alleged rampant corruption in the government departments, stop widespread power theft by the powerful, and, more importantly, reduce reliance on foreign loans with harsh conditions and imported fuels, and these measures are likely to significantly ease burden the people and improve the current bleak scenario.
Continued enhancement in the gas and electricity tariffs on the pretext of a commitment to the IMF is becoming unbearable for consumers, struggling for the last couple of years to cope with soaring prices of food and fuel, eroding real wages, and rapidly declining purchasing power. If the government is committed to elevate prices of gas and electricity, it should also focus on some social welfare measures.
While the cost increases have partly been driven by the rise in international fuel commodity prices, it is the inexorable increase in capacity payments that have driven the bulk of the power sector tariff increment hikes.
The review of the IMF program was supposed to take place in September last year, but the program got stalled after Ishaq Dar returned to the country from self-exile in the United Kingdom and became the finance minister. And, when the country was on the brink of default and Pakistan lost 2.5 billion dollars, we had no choice but to accept all the terms of the IMF.
Instead of continuing to burden the public with indirect taxes, the government should impose a tax on the agricultural income of the landlords and devise a strategy to collect taxes from the non-paying business class.
The common consumers of electricity and gas are between the proverbial the devil and the deep sea as they are getting increasingly frustrated with the rapidly rising cost of living that is the result of an unabated struggle to curb inflation while supporting economic recovery plans of the incumbent government.
The outcome of the country’s largest-ever fuel price adjustment charges and the size of the various taxes being collected by the government on them have been taken to an unbearable level. As the country’s foreign exchange reserves have plunged to a dangerously low level and the federal government has amplified pushing extreme conditions tabled by the IMF to revive the $7 billion Extended Fund Facility (EFF) stalled for months.
The new agreement will hit the low-to middle-class households as the utility bills in the coming months would push them to more trouble and make it difficult for them to pay their bills.
The bad news is that electricity prices in the country will continue to climb in the coming months as the government is seeking loans after loans from international lenders and has no pragmatic and long term plan to undertake reforms in the public sector.
