MINISTER for Finance Dr Shamshad Akhtar has presented a virtually dark picture of the economy as she concluded during her news conference on Thursday that the country cannot avoid yet another programme of the International Monetary Fund (IMF), conveying a clear signal to the masses that there would be no relief for them in the foreseeable future. Instead, she unkindly told people that both electricity and gas tariffs would be revised upward again as per the latest understanding with the global lender. The interim minister said that Pakistan would have to go into a medium-term fresh bailout package from the IMF in the wake of fragile macroeconomic stability which means there is no way to run the country without the clutches of foreign aid that now comes on terms that impinge upon the national sovereignty and add to the burden of the people.
There is something seriously wrong with the approach of jacking up electricity and gas tariffs every now and then on the pretext of stemming the rising circular debt. The unsustainable tariffs offer no solution to the core problem but sound a death knell for the family budget and the overall economy and, therefore, the government should adopt a realistic policy, identify real causes of the circular debt and take measures to bring down energy tariffs. The Minister also claimed that the FBR’s envisaged tax target of Rs9.4 trillion would be achieved but it was not yet decided which areas would be further brought into the tax net in case of requirement of additional taxation measures. However, there are consistent reports about plans to impose taxes on retail and real estate sectors which would be passed on to the common man. Dr. Shamshad Akhtar also underlined that the exchange rate would be determined on the basis of demand and supply but failed to acknowledge manipulation of the market by some unscrupulous elements and whether the government would continue to exercise the required level of vigilance. No doubt, the deal with the IMF would encourage external flows from other sources which might be a source of satisfaction for the cash starved government but the overall conditions of the IMF are compounding challenges of the economy as well as national institutions. There is a report that the Finance Ministry has declined supplementary grant for federal government hospitals that are not in a position even to pay salaries to their employees. This is the natural consequence of the unrealistic cuts in the budgets prepared by various institutions and ministries.
