Mr. PM - halt the tsunami of price hike

It was depressing to see a father killing his three sons so mercilessly and he did this heinous act as he was unable to feed them because he was unable to cope with the price hike situation in the country. There are many such incidents as this price hike is creating numerous social issues in our society.

Great hopes build great nations but it is unfortunate to see the cabinet ministers giving statements and signalling further inflation which is attributing more to the depression of a common man.

Countries devalue their currency in order to boost their exports in sheer urgency but unfortunately the government has done this infamous devaluation on the direction of IMF and not to enhance our exports as the exports stand intact.

PTI government since coming to power has exercised devaluation of rupee four times in a row in order just to seek help from IMF irrespective of government’s statements about bailout package from IMF. PTI took over in August 2018 when dollar exchange rate was 124 PKR which was given an instant rise to 135.20 in October. Following the same month, dollar was closed at 133 PKR which has now inclined to 140.60 PKR and I expect it to cross 150pkr rate reaching an all-time high by the end of this year. It is a well-known fact that the Rupee - dollar rate is always fixed by the government against all the international norms and state bank has to abide by the orders of the Ministry of Finance so we must be ready to experience another fall in the value of rupee. But as a part of their regular exercise of blaming every negative thing on previous governments, Pakistan’s minister of Finance Asad Umar has again blamed it all on previous government and state bank’s policies. Despite the devaluation of rupee by 30% in first four months of PTI government, exports are still on decline.

Adding insult to the injuries of common people of the country, the IMF continues to dictate stricter conditions on bailout package for its implementation by the government which has included imposition of more taxes worth Rs150 billion. Another condition includes further devaluation of rupee as well as a tighter monetary policy and increase in general sales tax to 18%. IMF has also demanded a significant increase in gas and electricity tariffs. How will a common man survive with this heavy tsunami of dearness and is this government even capable of handling the growing anger of the public? The finance ministry has not yet even specified how much of emergency finance the government has planned to seek from IMF.

The after effects of the second unwanted mini-budget presented by the PTI government in January 2019 have been rightly in accordance with the public fears and my previous analysis indicating the heavy burden on the public and this mini budget /so called reforms package has already increased prices of 100 utility items. The mini-budget has proven to be negative tax effort, an exercise to grant numerous concessions for businesses, incentives for investment as well as providing ease for non-filers. The mini-budget has clearly taken the country further away from economic stability.

Due to constant depletion of value of rupee, Pakistan’s annual inflation rate has increased to 9.4% in 2019. It has been the highest inflation rate since June of 2014, as prices have advanced faster for food & non-alcoholic beverages (4.52% from 1.58% in January) Prices of 15 items which recorded increase in their average prices included tomatoes, chicken (farm), bananas, onions, gur, milk (fresh), rice (irri-6), vegetable ghee (loose), mustard oil, beef, wheat flour (bag), tea (prepared), gram pulse, mutton and wheat.

Furniture & household equipment (9.24% from 8.18%); education (10.21% from 10.04%); other goods & services (9.87% from 8.96%); and recreation & culture (8.64% from 8.47%). On the other hand, cost slowed for housing & utilities (11.55% from 11.59%); transport (13.32% from 14.96%); clothing & footwear (6.85% from 7.17%); communication (7.77% from 7.79%); health (7.76% from 8.40%); alcoholic beverages & tobacco (13.21% from 14.24%); and restaurants & hotels (5.70% from 5.59%). On a monthly basis, consumer prices increased 0.64%, after a 1% rise in January.

Moreover, the government has left no choice for people than to commit suicide after raising the prices of power commodities. The government last year had increased gas prices by up to 143 per cent despite their tall claims that it would not put a burden on domestic consumers. The middle class society of Pakistan has to pay over Rs.30, 000 monthly as amount of gas bills more than that of their total salaries. People are compelled to pay for gas they haven’t used with zero gas pressure in morning.

The government charged standard rate of 17 percent sales tax on all four petroleum products from March 1, 2019. The price of high speed diesel (HSD) had been increased by Rs 4.75 per litre. Per litre price of kerosene oil had been increased by Rs 4.00, petrol had been increased by Rs 2.50 and light diesel oil (LDO) by Rs 2.50. These prices were applicable for the whole month of March 2019.

Now, in a bid to throw another bomb of price hike on public, Petroleum Division has again increased Rs11.92 per liter in petrol price, diesel Rs11.17 per litre, Kerosene Oil Rs6.65 per litre and Rs6.50 per litre hike in Light Diesel Oil price.

It is supposed that maybe these are the changes PTI has been promising to make for years. The masses that were expecting revolutionary changes from the government to curtail price hike, poverty and unemployment have become all hopeless and it is feared that they may come out on the roads if the situation remained the same for next few days.

Nobody has forgotten how Imran Khan in his dharna had sparked anger among the public and called for civil disobedience against the previous Government on price hike issue. The government should immediately halt the situation with strategic measures before the public itself comes out for its rights. The economy is going downhill and the government need to take some bold steps to correct it now. As a first step, they need the control the skyrocketing price of dollar only then the inflation will be controlled. Measures should be taken to increase the exports so that the exchequer can be stabilized otherwise nobody can save this country from going bankrupt.

The writer is a PPP Senator, former Interior Minister of Pakistan, and Chairman of think tank “Global Eye” and Senate Standing Committee on Interior. 

He can be reached at: rmalik1212@gmail.com, Twitter @Senrehmanmalik

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