That the ruling alliance has taken over a month to agree on measures to take the country out of economic crisis does not reflect favourably on its efficiency. This doesn’t support PML(N) Senior Vice-President Shahid Khaqan Abbasi’s claim that the government is working hard to get the situation under control. The delay in decision making has led rupee to lose 6.2 percent of its value over the past month. The stock market has suffered badly as it was under pressure on account of the depletion of foreign exchange reserves, delay in the resumption of the IMF programme, no development on funding from Saudi Arabia and UAE and the PM’s reluctance to withdraw the petrol subsidy. Despite a go head given by major allies to withdraw the subsidy on petrol products, important decisions needed to offset the negative impact of the withdrawal have yet to be announced.
The most important issue is how to lighten the impact of the big rise in the price of petroleum products on the poor as well as on the lower middle class. A lot of debate has gone on over the issue during the last couple of years. The only agreement reached so far is to provide only targeted subsides directly to the deserving rather than subsidizing goods through mills and other outlets. It has also been proposed to divert a large chunk of development funds to provide targeted subsidies and use the Ehsaas Programme database to identify the deserving people. The government needs to urgently come up with an effective plan of targeted subsidies.
The govt needs to decide to remain in power for the remaining 15 months, during which it should try to turn round the economy by arranging loans, raising more taxes, reducing imports and increasing exports. The situation presents an opportunity to the coalition partners to jointly prepare a charter of the economy. While the PTI wants the government to leave urgently and elections to be held within three months, major government partners are agreeable to a 15-month tenure to fix the economy and leave the country a better place than it was at Imran Khan’s fall.
