Prime Minister Imran Khan’s economic relief package has generally been welcomed but it has also drawn a hail of storms from various quarters. The relief package is meant for about 130 million people left with reduced purchasing power after the recent price hikes. Among other things, discounts of up to thirty percent will be offered on staple items, such as oil, flour and pulses, to over half the country’s population.
The hefty Rs120 billion subsidy is one of the biggest in Pakistan’s history. As the Prime Minister explained, the package is well targeted as it would be executed on the Ehsaas module, ensuring that the subsidy reaches genuine, deserving sections of society. It may be added here that Ehsaas has developed a digitally enabled mobile point of sale system with the National Bank of Pakistan to serve beneficiaries through a network of grocery stores and the use of a digital platform will help track utilisation of the subsidy.
Objectively analysed, the relief package is a welcome initiative by the government faced with the dual challenge of soaring oil prices and a depreciating rupee. It will enable those in the low income brackets to purchase essential items, such as flour, ghee and pulses at 30 per cent lower rates for the next six months.
The PM often talks of building a welfare state. It is in this context that he acknowledged in his speech that 20 million families are in need of state patronage to sail through the present difficult times. The Ehsaas cash support programme is a success story under which Rs260 billion are distributed annually among 12 million families. Another laudable initiative is the Kamyab Pakistan programme with a funding of Rs1,400 billion for various self-employment schemes with interest-free loans to four million families. All these efforts are designed to cushion the poorest of the poor from the adverse effect of the ongoing economic crunch.
However, the Opposition parties have rejected the relief package, saying that it is a political stunt and not adequate to meet the needs of the people groaning under the burden of crushing price increases. Another point of criticism is that it is neither sustainable nor a complete answer to the consistently decreasing value of money. According to economists, subsidies only sink the government’s money without any measurable positive impact. According to them, a better strategy would be to invest in projects that promise some sort of economic returns.
The Prime Minister’s argument that prices are cheapest in Pakistan has drawn the ire of members of the public, who have pointed out that incomes here are much lower than in regional countries. The hard truth is that the general public is faced with the double dilemma of rising inflation and unemployment, the two indicators that directly impact their daily lives.
However, we must remember that certain factors are beyond the control of the government. The entire world has been facing unprecedented levels of inflation ever since the pandemic hit and supply lines got choked. Various governments have adopted different approaches to deal with the problem. Some have been printing more money to help increase the cash flow. But this has resulted in further accentuating the inflationary pressures.
The government has offered many subsidies and packages since the pandemic began. But we must recognise that it alone cannot deal with the situation unless the public as well as private businesses also extend a helping hand. As a nation, we are not attuned to changing our wasteful habits in times of economic crisis. We waste billions on importing tea and other luxury items which we can do without. The concept of consumer resistance is unknown to us. However high the price, we are not ready to cut our use of inessential items, like sugar, which is otherwise known as white poison.
The private businesses can also play their role in easing the pain of inflation by offering better salaries to their employees. To this end, legislation can be made to raise the minimum wages as well as dearness allowances and make it mandatory for employers to offer health insurance to their workers. Such policy decisions to protect workers’ rights and enhance the well-being of the general public are the need of the hour. The government must move quickly on this front to help improve the general standard of living of the people.