TRUE to its business-friendly policies, the government on Thursday concluded a deal with exporters under which subsidized electricity at about Rs 20 per unit would be provided to them in a move that will restore the trader community’s confidence in the government.
After talks with a delegation of exporters, Finance Minister Ishaq Dar announced that the per unit electricity cost for the five export-oriented sectors has been agreed at Rs 19. 99 per unit that will involve Rs 90-100 billion annual subsidies.
There is no doubt that the only viable solution to the financial and economic crisis facing the country was to increase productivity so that the surplus so produced could help earn much-needed foreign exchange.
The increase in exports was not possible without bringing down the cost of production in a highly competitive global market and, therefore, the decision of the government would be appreciated by not only the relevant sectors but also the people of Pakistan.
However, there are two key issues involved, which need to be taken care of by the government.
We have witnessed in the past that the incentives provided only for the export purposes were widely misused by some unscrupulous elements among the business community and as a result the country suffered but the intended benefits were not realized.
Similarly, the subsidy to the five sectors involves a huge amount of about hundred billion rupees and one hopes this burden would not be shifted to the ordinary people, who are already weary of inflation and increased burden of taxes.
The move of the government comes at a time when an IMF delegation is arriving to review the ongoing programme but the Minister said he did not feel the need to take the IMF into confidence over grant of subsidies as the government has the fiscal space to do so.
People also expect that the Minister would succeed in his stated objective of getting the IMF programme revised in the backdrop of the situation arising out of the devastating floods.
