WITH elections around the corner, and Pakistan facing its worst economic crisis, the situation demands serious restructuring, instead of slogans promising the moon, with empty coffers. What is needed are realistic promises of subsidies. Given the present gap between total annual revenues collected by the state and its expenditure, including defence and debt servicing, subsidies cannot be given on a massive scale, as is being promised by certain politicians. This country relies on foreign debts to bridge the ever-widening deficit between revenues and expenditure and meet current expenditure. Persistent neglect of investment in human resources haunts lives of ordinary citizens and we are bracketed amongst Third World countries, with poorest socio-economic development indicators in the region.
It is not that our young men and women lack talent, or aptitude, to acquire skills through research and development, but the state’s lack of priorities. How can anybody in Pakistan, in such dire circumstances, promise giving free 300 or 200 units of electricity valued at Rs8,000 and Rs5335 respectively to over 22 Million? This translates in the case of 300 units to Rs 2,112 Billion and Rs1,408 Billion annually. It is far more than the BISP annual budget allocation of Rs 471 Million. Such extravagance has not been indulged by countries like Malaysia or India, with large FOREX reserves, nor in the developed world. The only example in the region is the Delhi Union Territory government, headed by Arvind Kejriwal, a mechanical engineer from the prestigious IIT, who served as a civil servant after appearing in competitive examinations.
None of the other main political parties like BJP or Congress have even contemplated it. Our politicians and powerful stakeholders need to stand up and accept the gravity of the crisis, because of years of abuse, poor governance and extravagance indulged by the visionless ruling elite. Just 263 miles away from Lahore is Delhi, another city with alarming pollution, due to unplanned urbanization. In 2011, there was a movement in India against corruption by Arvind Kejriwal and Anna Hazare. By 2015 Kejriwal was able to win 67 out of 70 seats to form a government as CM of Delhi. In 2022, AAP emerged as the governing party in Punjab. Kejriwal’s ideology is “Staunch Patriotism, Staunch Honesty and Humanity”. He promised to change the system and increase tax collection, withdrawal of all subsidies to affluent elite and enough state revenues to offer subsidies, such as free 200 units per month in electricity to residents of Delhi, worth an estimated Rs 3.09 Billion in 2021-22, and subsidized education, from their own resources. This subsidy is not offered in Punjab, because as yet, that state does not give them the fiscal space to do so.
What is needed in Pakistan is a plan to raise revenues through direct taxation and adoption of austerity measures starting from the top. This requires uniform direct taxation on Retail/Wholesale sector, Real Estate, big landlords, Tobacco, Sugar, Fertilizer etc., withdrawal of all existing subsidies to the elite, either paid or elected. It also entails plans to withdraw tax exemptions to foundations involved in commercial profitable enterprises and limit this facility to those who offer Medicare to the poor, elderly and disabled people. Only then it is possible to offer targeted subsidies to those who need it the most. What is feasible is to withdraw indirect taxes and surcharge charges levied on those utilizing 200 or 300 units of electricity. It can also give fiscal space to reduce indirect taxation on all basic food items, along with a ban on luxury imported goods.
International financial institutions like the IMF have pointed out glaring abusive elitist culture, which offers subsidies to the elite, with hardly any for the most deprived sections. This State needs to reassert its primary constitutional obligation to offer subsidized education, health, clean drinking water etc., to the most deprived sections of society. Without investment in subsidized quality education, this country will be deprived of any chances of cultivating geniuses like Professor Abdus Salam etc who were a product of state subsidized schools, colleges and universities. Today education has become an expensive commodity that is within reach of a few. It is the human resources of a country which makes or breaks a nation and differentiate between developed and underdeveloped countries.
Political parties must submit plans to bring Pakistan out of the economic quagmire that engulfs and threatens its national security and sovereignty. Similarly, the electorate must call off the bluffs and promises of giving them the moon, by irresponsible politicians. They must resist being exploited with religious slogan mongering. Religion is to be practiced and not exploited. Pakistan faces a serious issue of unemployment which requires that all recruitment in SOEs must be strictly on merit and qualifications alone. This practice of reducing SOE’s as dumping grounds to rehabilitate blue-eyed retired government servants, who whilst being beneficiaries of pension and other perks, like lifetime healthcare, must stop. They have driven SOEs and other important sectors like PIA, Steel Mills, Pakistan Railways, WAPDA etc., which were once, either profitable or break-even, but now reduced to white elephants.
A few politicians are promising free houses etc. Similar promises were made in 2018 also, but never realized. Individuals involved in facilitating Land Mafia’s forcible possession of small land holdings, will never be able to address issues faced by those living below poverty line. At the most, they can give back the land to original owners, who were dispossessed with their connivance. Beneficiaries of big houses spread over several acres, either gifted, or on easy instalments, cannot be expected to kill the “Goose that laid golden eggs” for their sole benefit. Fruit orchards and green agricultural land which produced food that was affordable, because of higher yields, have been converted to concrete jungles, creating shortage and price escalation in basic agricultural products, because of shrinking agricultural acreage, with a rising population. The adverse impact, of destruction of trees and green pastures, along with unplanned urban expansion has impacted the environment and reduced lifespan of citizens by 5 to 7 years in cities like Lahore.
—The writer is contributing columnist, based in Lahore.
Email: [email protected]
views expressed are writer’s own.
