Subsidies for the poor

During an emergency or a crisis situation, it is usually the poor who are unable to cope with deteriorating socio-economic conditions. In such a situation, subsidies are provided so that vulnerable communities are able to make ends meet. Unfortunately, in Pakistan, the rich have been enjoying a significant percentage of these subsidies even during times of severe economic crunch. Last year, a UN report found that a gigantic $17.4 billion in subsidies were being provided to the elites of Pakistan — including the corporate sector, feudal landlords, the political class, and the military.

The report further states that the richest 1% in Pakistan are the second and third-highest recipients of privileges and collectively own 9% of the country’s overall income. This is a major reason why inequality has exacerbated across the country and millions of people are in the grip of poverty. What is even more reprehensible is the fact that subsidies meant for the poor are also being exploited by the rich and powerful. Subsidised ration items offered at utility stores are being shamelessly taken by the rich, leaving little for lower-income households. In a recent meeting the Public Accounts Committee (PAC) proposed a digitised mechanism for transparency in this regard, after seeing that four bags of subsidised flour was issued in the name of the PAC chairman himself.

This shows that the culture of exploitation is rampant and must be stopped to avoid further socio-economic degradation. Inequality is not an isolated issue and can lead to a host of other wicked problems being witnessed in Pakistan such as increased crime rate and food insecurity. In order to curb this, the government must rethink its outlook on subsidies and ensure that subsidised essentials such as petrol and food are provided to those in need through a robust and transparent mechanism. The elite must learn to hold their own.