Suffering consumers

EDITORIAL: It needs to be said that the government is guilty of either criminal neglect of the suffering fortunes of Pakistani consumers or of deliberately distorting the economy by lavishing its own officials with perks and privileges at the cost of honest taxpayers.

For example, a Pulse Consultant survey sprang no surprises by disclosing that challenges of urban consumers increased 14 percent year-on-year in Jul-Aug, leaving 74 percent of them unable to meet their household expenses with their current incomes. Of those, 60 percent said they were forced to cut expenses (with a direct impact on grocery shopping), 40 percent had to borrow to survive, while 10 percent made ends meet by taking on additional part-time work.

This is the natural outcome of the great fiscal squeeze that has been put on the country’s middle- and lower-income classes; primarily to meet the harsh upfront conditions of the IMF bailout programme. And this trend will get incrementally worse as the present fiscal rolls on and the EFF’s (Extended Fund Facility’s) conditions get harder by the tranche.

At the same time, a report of the auditor general has revealed that the finance ministry, which bears responsibility for ensuring fiscal discipline – especially in these fragile times – distributed no less than Rs240 million as honoraria among its own officials “without an approved policy of the cabinet and in violation of rules” in fiscal year 2022-23.

And to add insult to injury this sum was not included in salaries to evade income tax. So, in essence, they got hundreds of millions sprinkled over them just because they work for the ministry and none of this will go to the exchequer in the form of taxes, which are desperately needed for the country’s survival, because ordinary people are supposed to make up for that gap.

Clearly, those at the helm are not the least bit bothered about the fate of the people or the country. They are happy to be able to bend the system and divert more and more money towards themselves and their kind, and keep themselves protected from the tax net, regardless of the bigger picture.

Remember this revelation comes on the heels of the prime minister’s directive about belt-tightening at all levels of government, something that was already shamefully ignored by the finance ministry in the annual budget as it granted more pay and perks to government servants even as it slapped unprecedented taxes on the salaried class.

That is why the people ought to watch very closely how the government addresses this miscarriage of justice. If misappropriation of hundreds of millions of dollars is also brushed under the carpet, as usual, then the government’s seriousness, or lack thereof, about handling the fiscal crisis will be properly exposed.

The government should also worry about the many households that are already struggling to meet their bills. Pakistan’s poverty rate has been deteriorating since the Covid days, and now with IMF’s demands putting extra pressure on everybody, nobody is talking about the scenario when millions of homes are deprived of the cash flows to stay solvent and the desperation spills out onto the streets.

Surveys like Pulse Consultant’s have rather small sample sizes, quite understandably, but they still provide valuable information that the government must not ignore, especially when it knows that its own lopsided tax policies are about to make things much worse for a majority of this country’s population.

It’s a shame that the government does not have its act together even this late in this battle of survival. If it does not pull its socks up immediately, there’s every chance that it will lose its way before the tough IMF programme, which is yet to start, runs its course.

Copyright Business Recorder, 2024