TWO media reports clearly suggest that the policies of the government are contradictory and not based on proper studies and reasoning. The Economic Coordination Committee of the Cabinet (ECC) has approved a summary from the Finance Division for gradually phasing out the Home Remittance Incentive Scheme (HRIS). Another report said Overseas Pakistanis sent home $3.42 billion in October 2025, marking an 11.9% year-on-year increase, offering some relief to Pakistan’s fragile external account at a time when the trade deficit has ballooned to $12.6 billion, driven by a surge in imports.
Remittances by Overseas Pakistanis have become backbone of the country’s economy in the absence of any meaningful increase in exports but the decision to phase out incentives by 2027 seems to be short-sighted and may deprive the country of an assured source of foreign exchange. Introduced to encourage overseas Pakistanis to send money through formal banking channels, the HRIS played a vital role in sustaining monthly remittance inflows of over $2 billion, strengthening Pakistan’s external account position. The ECC endorsed a phased, data-driven approach to ensure stability in remittance inflows and to avoid any abrupt disruption that could adversely impact the economy but in practice the decision could lead to a remarkable decrease in remittances through the formal banking channels. This is not the only example of making wrong choices at wrong times as we witnessed this in the case of anti-solar policies and export/import of sugar. Wholesale increase in power tariff pushed consumers towards the modern solar technology but their investments face continued threats due to lop-sided approaches of the Power Division. Decisions should be based on merit and not transitory gains.
