THE government has reportedly made up its mind to come up with a mini-budget to address the concerns of International Monetary Fund (IMF) and secure the next tranche which is being described by the economic experts as vital to ensure cash inflows and economic stability.
A hike in electricity prices by about 30 per cent and even bigger jump of 60-70pc in gas prices coupled with a new set of tax measures and increase in interest rates are likely to be key features of the mini-budget.
There is no denying that these tough decisions will further push up the inflation rate much to the disappointment of the common man but these have become inevitable to keep the economy afloat as loans even those offered by friendly countries, have become conditional to securing the next IMF instalment.
Instead of doing politics and demonizing the IMF and other international financial institutions which will not benefit anyone, it is really important to support the government in taking the difficult decisions and reviving the IMF program.
Politically, these will be bitter pills but these will have to be swallowed to save the country from default.
It is for the government officials to present the true picture before the masses but at the same time it must also ensure that the poor segments of the society are not overburdened.
The lower income segments should be supported by strengthening the social protection program.
Through the vast network of Utility Stores Corporation, subsidy on essential items can be provided to the vulnerable groups.
We believe that the international lender will also have no objection to extending relief to the poor lot if assurances are made to it about revenue generation and reforms, especially in the energy sector.
The IMF will also be cognizant of the problems faced by the country due to recent devastating floods, hence, we expect a greater flexibility from it.
However, in the medium and long term, we will have to take such decisions and steps that take the economy towards sustainable development.
Export led growth is the only way forward through which we can steer the country of the debt trap.
