New Delhi, March 17 As Pakistan announces austerity measures to navigate the Middle East crisis at home, the price to be paid for by the general public is going to be a lot higher than that to be paid by the three pillars of government at federal and provincial levels: the executive, the legislature and the judiciary, a new report has lamented.
Business Recorder said in a report that the “government must consider slashing its current expenditure to make good on its pledges for austerity”.
After the steep fuel price hike, the government announced a wide-ranging austerity package, to be applicable for two months.
The question is: Which Pakistani sector will bear the brunt of the cost of the Middle East crisis – government or the general public?
The Prime Minister’s austerity package is envisaged to be applicable on all ministries, departments, autonomous bodies, defence organisations, the judiciary and parliament for two months.
The savings from these austerity measures were not projected, though for one of the items, “a 4.5 billion rupee saving was noted”.
“This is perhaps indicative of, at best, the expectation that strict enforcement may generate a substantial amount (given the daily envisaged monitoring to be undertaken by a committee under the chairmanship of Ishaq Dar) or, at worst, lack of necessary homework that requires itemisation of the exact savings of each specific component of the package,” said the report.
Moreover, projecting sales after the recent rise in fuel price would be a challenge given that a rise in fuel price today will erode the value of each rupee earned as a householder struggles to prioritise his limited income.
The International Monetary Fund (IMF) recently projected a shortfall of 157 billion rupees in levy collections in its second review.
“It is therefore fair to argue that the decision to raise the levy on 7 March was agreed with the Fund during the third review under the Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF) in Karachi and Islamabad, as well as virtually, (25 February to 11 March), which ended inconclusively,” said the report.
However, GDP growth rate is without doubt going to be negatively impacted globally, and Pakistan will not be an exception, as ongoing conflict poses significant risks to the global economy particularly energy prices, inflation and regional infrastructure.
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