By Aleem Malik, WEEKLY PULSE MAGAZINE, October 14, 2013
The government has failed to meet its initial claims to strengthen the economy of the country. Under the conditions of International Monetary Fund (IMF) bailout package, the government has decided in principle to revoke subsidies of Rs345 billion given to the power consumers during next three years. Subsequent to this commitment with IMF, the PML-N government has raised the power tariff by 210 percent while prices of petrol have also been increased by Rs5.88 per litre. To avert criticism from the people, the government has given logic of growing trend in crude oil prices in international market and rupees-dollar depreciation that forces them to increase the prices. Increase in the petroleum prices and power tariff will put extra burden of Rs478 billion on the price stricken masses of the country. This tactic will add handsome amount to the national kitty, but the people of the country will be in a miserable condition.
Economic mangers of the country have failed to stop the dollarization in the country and a few people for their vested interests have hijacked the currency market. In a meeting of the Senate Standing Committee on Finance and Revenue, State Bank of Pakistan Governor Yasin Anwar has remarked that daily 25 million dollar are being smuggled through different airports.
When PLM-N government came to power, dollar was traded between Rs 98 and Rs 100, however within ninety days it crossed Rs 111. After the involvement of State Bank of Pakistan, dollar depreciated by Rs4.64 and stands at Rs 106. Although it reduced against rupee, but independent economists were the view that this surge of dollar vs rupees gave loss of Rs 385 billion to the national exchequer as increase of one rupee in dollar value puts additional burden of fifty five billion rupees on the economy.
It is very strange that on one side after increasing the oil and electricity prices government claims to have strengthened the economy, while on the other, dollarization has impacted severely on the economic sector of the country. The whole process will create problems for poor people whose condition is going from bad to worst.
After recent increase in the power tariff, common man will have to bear 1,300 rupees extra burden every month, and those who consume 201 units will pay Rs 2,814 against Rs 1,622, while after addition of GST, Neelum Jhelum surcharge and TV fee, this amount will increase to Rs 15,000. This amount is sufficient to disturb the kitchen of the common man.
People with Rs 15,000 monthly salary will have to manage through other sources or to borrow to make end meet.
Under the recent decision, power tariff has been increased by 87 percent for those who come between 201 and 300 units slab. This job has been done by the experts sitting in National Electric Power Regulatory Authority (NEPRA), leaving citizens bewildered.
The Ministry of Finance claimed that after this recent increase in the power tariff, the government is still giving subsidy of Rs 167 billion. Officials of the Ministry of Water and Power were of the opinion that surge in furnace oil prices had increased the generation cost and left no other option for the government but to increase the tariff. Interestingly, the situation is totally different. Power distribution companies have failed to reduce transmission and distribution losses and theft, and poor consumers are paying the cost of the inefficiencies of the government. Officials of the Ministry of Water and Power often accepted that billions of rupees electricity was pilfered (stolen) annually.
Top officials of the finance ministry said that steps had been taken to stop dollarization. The government has planned to bring amendments to Anti-Money Laundering Law and to take strict action against those banks which are involved in smuggling of dollar abroad.
Sources in the Finance Ministry informed Weekly Pulse that through three major airports of the country, millions of dollars are being smuggled and FIA has been given a task to stop this practice and nab all those who are behind this act. They said the government has initiated these steps to give support to the economy of the country.
Another deplorable phenomenon in our country is that instead of streamlining things, the government constitutes committees for every issue and heavy amount is spent on the business of these committees, which have failed to get fruitful results so far.
A question arises here that after all these steps, will people get any relief or the situation will remain the same after four to five years. Let’s hope for the best.