IN its monthly economic outlook, the Ministry of Finance has maintained that the new government would help revive the economy and build on the hard-earned gains made over the last six months. It said that difficult and unpopular measures, including a reduction in the subsidy bill on power and gas through timely implementation of quarterly tariffs, helped improve the primary account. No supplementary grants had been issued during this period and the PSDP projects that fall under the provincial domain had been transferred to provincial ADPs.
Of course, the interim government, the count-down of which has begun, is leaving behind an economy that is well set on course correction and things can really improve further subject to continuation of the policies, which is dependent on political and economic stability. Increased focus on domestic resource mobilization and successful negotiations with multilateral institutions and bilateral donors to ensure external inflows have helped Pakistan send the right kind of signals to the outside world and restore confidence of the potential investors. However, we have been pointing out since long that the modus operandi used to mobilize internal resources is directly in clash with the noble objective of putting the country on the path of accelerated growth and development, which is the only viable option to address the challenges of core concern for the country as well as its people. Pakistan has the potential to increase tax collection substantially by bringing into tax net non-filers and under-filers but regrettably focus still remains on burdening the existing tax-payers. Hiking electricity and gas tariffs every now and then and revising prices of POL products upward is the easiest way to mint money but at the cost of the miseries of the people and suppression of prospects for industrial, commercial and agricultural growth. The so-called Fuel Price Adjustment and Quarterly Adjustments are the most exploitative tools in the hands of Discos/Nepra. In theory, these are purely temporary/adhoc increases but their inflationary impact is permanent as charges once hiked by manufacturers and service providers on this account are never reversed. The Finance Ministry is taking pride in denying supplementary grants, forgetting that this ‘achievement’ is the core reason behind denial or late payment of salaries and pensions to many departments. People are hand-to-mouth and expect the new government to remove glaring contradictions in policies and find out-of-box solutions for economic ills.
