KANDIARO:
Recently, the government announced a petrol subsidy of Rs100 per litre for low-income people who have motorcycles, rickshaws, 800cc cars, and other small vehicles. The government claimed to have taken the decision to lift pressure off the public. But the International Monetary Fund rejected this scheme as it was sceptical about the amount of funding required and asked the government to provide a detailed plan.
The scheme has multiple flaws and will not reduce the problems of inflation-hit people. First, the government did not reveal how it will deliver this subsidy to the targeted population. Will there be similar queues and subsequent chaos at petrol stations as was seen at flour distribution points recently? In addition, lots of people who are affected by the inflation may have old model cars that are more than 800cc, but they will not be able to avail the subsidy as they will not fit the government’s bracket. Subsidised petrol will not be given to bigger transport vehicles, which may result in an increase in public transport fares including cab services, which are used by many middle and low-income groups.
The government should avoid these populist policies to save its reputation and increase its vote bank because subsidies only increase problems for the country. It should instead work towards political stability and sustainable economic growth. The government should be transparent about the economic situation and devise structural reforms to address the causes of the prevailing crises. We will need to swallow a bitter pill for the sustainable future and prosperity of Pakistan and its people.
Published in The Express Tribune, April 10th, 2023.
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