Skewed subsidies

We should lend our ears to the disclosure that over the years, the government has been giving a subsidy of more than Rs4 trillion, (or Rs2tr), per annum. More surprising is that both the poor and rich are equally availing this huge amount of subsidies though mostly the poor are supposed to benefit from them. This is an ironic situation where both workers and shirkers are equally benefited. The subsidies and grants make 4.5% of GDP. The Special Assistant to the Prime Minister on Revenue informed ministers of this huge amount of subsidies at a weekly cabinet meeting recently. He gave the cabinet a detailed briefing on the need for rationalisation of subsidies and grants and presented an overview of revenues and expenditure together with subsidies and grants for the past 13 years.

At a presser after the cabinet meeting, Adviser on Information Shibli Faraz, however, put the subsidy amount at Rs2tr, and later the SAPM too gave the same figure, saying that “it is 23% of domestic debt”. At the meeting, chaired by the PM, the adviser gave proposals for targeted subsidies and suggested the use of Ehsaas database to ensure that only the poor benefited from subsidies. The PM gave instructions to take steps for rationalsation of subsidies. Faraz disclosed that nearly everything — including the government budget — was dependent on loans. This was besides the direct and indirect subsidies the government provided on wheat, electricity, gas and other essential things. He revealed that the country was being run on ad hoc basis as long-term policies were not formulated over the past five decades. He too said the present system of subsidies was biased against the poor.

No sane person can support a system that equally benefits the haves and have-nots. In other words, this is an arrangement where workers put in long hours of labour to provide more comfort to the leisure class. Of course, the leisure class is a species quite different from the rich. It’s time we gave up the habit of living beyond means in order to ensure social justice.

Published in The Express Tribune, November 12^th, 2020.

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