Power sector circular debt, which is the product of power theft, high losses and other associated factors, constitutes one of the major challenges for the Pakistan Muslim League-Nawaz (PML-N)-led government. It is a fact that the PTI government did little or nothing to bring about any significant change in this regard. It is widely reported that the present government is mulling raising power tariffs in order to meet one of the conditionalities of the lender of last resort, the International Monetary Fund (IMF).
Raising tariffs, in my view, will become meaningless in presence of ballooning circular debt. The previous PML-N government, too, was struggling, albeit unsuccessfully, with the challenge of power circular debt. That is why perhaps the then finance minister, Ishaq Dar, was often described as the ‘minister of circular debt’.
Riffat Bashir (Lahore)
Copyright Business Recorder, 2022