Decision to withdraw power subsidy questioned
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Subsidy withdrawal to hike prices, frustration– hit farm production
The Pakistan Economy Watch (PEW) on Wednesday criticized hasty decision to withdraw power subsidy given to lifeline consumers and agriculture sector.
The economic managers have taken this unpopular decision to get IMF’s $1.2 b tranche without considering its social and political implications. A great price has been paid.
The move will hit millions of the poor who will now prefer darkness to light. It’s also a severe blow to agricultural sector which will result in reduced farm production, high commodity prices and frustration, said Dr. Murtaza Mughal, President PEW while talking to a group of reporters at a local hotel.
He said that proposed raise in power and gas tariff by 31.6 per cent from Jan 1, 2010 will please IMF but hit the low-income groups. Increase in power tariff by 13.6 per cent and hike in gas price by 18 per cent will leave businesses in wilderness.
Dr. Murtaza Mughal said that FBR is facing a possible shortfall of Rs.60b in collections, non-performing loans have touched mark of Rs 440b, FDI has been reduced by Rs 55b and businesses are being closed.
Industry, trade, and agriculture sector is in a shamble. Many businessmen are unable to meet their export commitments. Refunds of sales tax are being held back while exporters are not getting rebates.
Banks are reluctant to lend due to increasing defaults which is slowing down wheel of economy. Trade cycle isn’t moving for majority and energy price hike is set to add to the problems, he said.
If government wants to improve the situation, it should curtail non-developmental expenses reduce number of unnecessary foreign trips and bring standard of living to a point that suits a third world country.
He questioned that how long we will look towards international lending institutions to get budgetary support and stabilize forex reserves.
‘We should do exactly opposite to what IMF dictates, he opined.
