You ViewsVOLUME 18 ISSUE # 36

Money-minting approaches

Aa has always been the case, the federal government has chosen to raise electricity tariff for consumers across the country to a mind boggling level. People were already struggling to pay the exorbitant per-unit charges laced with peak hour rates and a litany of taxes, duties and charges. This has been the most preferred way for successive governments to manage financial constraints.

Undoubtedly, such money-minting approaches prevail in monopolistic situations, as is the case with K-Electric (KE) which enjoys a no-holds-barred permit to make hay with the guarantee that the sun will continue to shine for as long as it lasts. That is some luxury.

Is this not a time for devising new, and, may I say, logical ways to share the inflation burden across all sections of society? The suspension of free electricity and fuel facilities to the highly privileged government officials — civil or military — should come as the topmost priority. The positive impact such a sensible step will immediately entail is pretty easy to fathom even for those who are deemed amateur economists. We are told that we do not have enough power resources to supply electricity at feasible rates, but the high and mighty, who have enough resources to pay whatever the per-unit cost is, continue to be supplied with free electricity with no cap on consumption. How long will we persist with the dichotomy? And, why should we? Why can we not all pay what we consume?

To ensure efficient power supply, the deficiencies in terms of line losses, delinquent consumers, bad debts and the largesse of extending free electricity to the tune of billions of rupees need to be overcome. Are the policymakers delirious? Baseline assessment suggests that if only free electricity is suspended across the board, the per-unit cost for consumers will not be more than about Rs8, and that, too, without accounting for the ‘peak hour’ gimmick.

The first step should be to make public a list showing the number of free units being provided to the categories of government officials every month, and the monetary values thus incurred on this class of super-privileged. The next step, naturally, is to discontinue the practice of free electricity. I wonder why the International Monetary Fund (IMF) does not demand such steps from the government during protracted negotiations. And if it does, why does it not stick to the demand?

Zahid Yusuf