The Federal Cabinet has approved a plan to increase electricity prices and wrap up subsidies in the power sector. According to the details, the government presented a plan to the IMF to jack up electricity prices by Rs. 7.91 per unit in four quarterly adjustments from February through November. Meanwhile, the government also approved slashing the electricity subsidy of Rs. 65 billion given to the exporters, and the reversal of Rs. 14 billion support previously offered to farmers under the Kisan Package with effect from March 2023.
Pakistan had been marred by persistent economic volatility and fiscal mismanagement of its administrators over the past decades which is continuing in the shape of politically motivated policies and a recurrent evasion of harsh measures that could reset the economy but shattered the politics of the rulers. Thus, successive Pakistani governments could not abide by the commitments they owed to the global lender while striking loan deals with them. Similarly, the current economic crisis is also another manifestation of this so-called pro-public behavior which promotes leaders’ politics for the time being but hurt the masses and the national economy forever.
Realistically, the coalition government delayed the talks for the ninth review for several months as it offered significant subsidies and other incentives to exporting industries and farmers to promote agri-growth and increase exports to consolidate financial gains but those endeavors were not inlined with the Pak-IMF deal. After multiple failed attempts to get some assistance from friendly nations to sail through the crucial period, the government was now determined to undertake all the steps set by the IMF as a prerequisite for the continuation of the loan program. In fact, the current fiscal reforms recommended by the IMF are actually the withdrawal of government subsidies or a reorientation of the past deal abandoned by the government. Although leaders desire to provide some relief to the masses but the national exchequer can’t afford those relaxations and the global lender doesn’t agree to such favors, so the nation must prepare to battle some hard times in the hope of a prosperous future.
