With the petrol hikes and tensions around the IMF turmoil, the cost of living has increased exponentially for the average person in Pakistan. The fund’s managing director has been vocal about the protection of the poor and taxing the rich to make up for the financing gap. While the debt restructuring plan is now a necessity and the tranche depends on its strict implementation, the people of Pakistan have been devastated. Amid all of this, Prime Minister Shehbaz Sharif has announced a relief package. A subsidy of Rs50 per litre will be given in the petroleum relief package, according to the press relief.
Implementation is set to begin soon and the terms of release depend on beneficiaries being qualified and registered with BISP. However, this condition is also dependent on motorbike owners having digital access to banks and being registered. Likewise, there are fears that the plan may not be as successful as complications may arise with the terms of the subsidy.
The other question is whether this scheme has been run by the IMF. If it is, then other subsidies can also be considered since some semblance of relief should be a priority for the government. The other pressing concern must be the progress of the IMF deal. Pakistan held 10 days of talks with the IMF delegation in Islamabad in January and February but no deal has been actualised yet. Now, within the race to implement tax measures, a progress report on the likelihood of the deal should also be announced. The government has been saying that tax measures will unlock the deal but we have been stuck in this cycle for ages.
Relief packages make sense, but there is also the question of bearing the costs. As mentioned, the terms of the scheme are unclear and the optics of this are also apparent. However, if this has a positive impact, similar schemes can be investigated