PRIME Minister Shehbaz Sharif has reiterated the government’s determination to navigate the country out of economic challenges by implementing structural reforms in the economic sector. Speaking at a cheque distribution ceremony for those affected by torrential rains and snowfall in Muzaffarabad on Friday, he emphasized the need to increase the tax-to-GDP ratio, harness natural and agricultural resources and combat issues like smuggling and power theft. Shehbaz Sharif highlighted the urgency of resolving tax evasion issues to boost the country’s resources, underscoring the importance of adequate resources for vital sectors like health and education. He also acknowledged the current practice of paying federal employees with borrowed money and stressed the necessity of making tough decisions to address the nation’s key challenges.
The speech of the Prime Minister is a clear indication in which direction the government intends to move in the weeks and months to come in a bid to tackle the challenges facing the country. Local experts as well as multilateral institutions, especially the International Monetary Fund (IMF), have consistently been arguing that Pakistan will have to follow the path of structural reforms as a way out of the existing economic and financial mess where running of the governmental affairs has become a difficult task without securing more loans. This policy is not sustainable as the country is already finding it next to impossible to pay back the debt it contracted in the past without obtaining more loans from bilateral and multilateral donors. However, structural reforms should be carried out in a manner that these do not add to the burden of the common man, whose income has squeezed phenomenally due to incessant hikes in gas and electricity tariffs, frequent upward revisions in prices of petroleum products, addition of multiple taxes and erosion in the strength of the rupee in the name of so-called market-driven exchange rate, which, in our case, is nothing but sheer manipulation by vested interests. Tax-to-GDP ratio surely needs to be increased to lessen reliance on external aid, which comes with strict conditions attached but it is a matter of regret that the successive governments miserably failed to make those who have the capacity to pay because of their influence in the corridors of power or pressure tactics. Why on earth a majority of the business class and professionals either remain out of the tax net or pay much less than their due share to the national kitty even after 77 years of independence? There is absolutely no justification to spare them any more when they always pass on the additional burden on the masses. The Prime Minister, while referring to the losses incurred by the State-owned Enterprises (SOPs), disclosed that Pakistan International Airlines (PIA) and power theft cause losses to the tune of Rs. 1,300 billion annually. The question arises why we have not been able to improve the working of the national flag carrier or privatize it on priority basis. Similarly, it is a matter of serious concern that the collective might of the state is hapless before power thieves and the losses so incurred are passed on to the honest consumers. Power sector is bleeding but we are unable to arrive at a definite conclusion whether Discos should be handed over to provinces or they should be run with the collaboration of the private sector. While the interim Government discarded the option of handing them over to respective provinces, the incumbent Prime Minister has constituted a committee to deliberate further on the matter. It is time that a well-considered and firm decision is taken to address this challenge effectively. There is also a need to shift focus of generation from traditional fuel to alternative resources like solar, wind and hydel to help bring down the tariff, which is highest in the region and has become one of the major hurdles in the way of economic and commercial activities. Agriculture is another area that can help overcome our economic and financial woes provided a coherent policy is formulated and implemented. Action against different mafias and smugglers produced positive results during tenure of the caretaker setup and the campaign needs to be augmented. It is also time that the anti-employee posturing of the Government comes to an end as no policy or agenda can be implemented without active support and involvement of the civil servants.
