Imran Khan's subsidies to destroy Pakistan's economy for next administration
Mar 21, 2022
Islamabad [Pakistan], March 22 : With the looming threat of a no-confidence motion, Pakistani Prime Minister Imran Khan is seemingly in a mood to provide subsidies to the general public even at the cost of the economy which has already plunged into crisis.
Miftah Ismail, the former Pakistani finance minister under the prime ministership of Shahid Khaqan Abbasi termed the industrial package that Imran Khan announced as a "bomb" to destroy the country's economy for the next administration, reported Business Recorder.
Many economists must be of the same view despite PM's claim that the relief package was possible due to improved tax collections. These can be substantiated because--first-- 3.799 trillion rupee tax collections (July-February 2021-22) are at par with the budgeted target of 5.8 trillion rupees however for the remaining four months of the current fiscal year there is likely to be a shortfall as the State Bank of Pakistan (SBP) allows the rupee to continue to depreciate with the objective of curtailing imports-- imports that contributed 52.2 per cent of total tax collections for the first eight months of this year.
Secondly, there has been a significant reduction in collections under non-tax revenue specifically in collections under petroleum levy budgeted at 610 billion rupees while actual collections are expected to be less than half due to the relief package.
Another reason for not supporting Imran Khan's industrial package announced on March 1 is because Pakistan is being retained on the grey list of the Financial Action Task Force (FATF). The ongoing talks on the seventh review with the International Monetary Fund (IMF) will remain stalled as the Fund, and all other international donor agencies, have pledged to work with the FATF.
Moreover, the package envisages granting fiscal and monetary benefits to the rich and influential at the cost of the general public. The conflict between the Prime Minister's claim that "mafias" are operating in all major sectors raking in windfall profits and his industrial package that would benefit mainly these mafias - those operating in the legal and illegal domain -- is sadly becoming starker with the passage of time.
On February 28, 2022, the Imran Khan government's announced relief measures to reduce prices of petrol and electricity are on account of Opposition pressure and public anger. The relief measures were announced by Imran Khan in an address to the nation. The measures include a reduction in the prices of petroleum products and electricity tariff by Rs 10 and Rs 5 respectively along with a number of new schemes including one on tax amnesty.
