No to power subsidies

There is a particular fiscal absurdity that Pakistan has perfected over decades — allocating ever-larger sums of public money to compensate for failures that those very sums were meant to prevent. The latest chapter unfolds between Islamabad's Power Division and the IMF. The government has proposed nearly Rs990 billion in power subsidies for the fiscal year 2026-27. The Fund has flatly rejected it. Caught between an unforgiving lender and a power sector that bleeds without pause, the government finds itself, once again, between a rock and a hard place.

Let us be clear about what this Rs990 billion represents. It is not investment. It is not reform. It is the price tag of institutional failure. Over Rs500 billion would cover electricity theft and systemic inefficiencies — losses rooted in weak governance and a state too politically conflicted to enforce accountability. When a government asks its citizens to subsidise theft on this scale, it is tantamount to covering its own negligence.

The human cost deserves sharper attention. The salaried class paid Rs606 billion in income tax last year — effectively financing the electricity theft of others while being forced to cross-subsidise low-consumption households through levies on their own bills. This is not welfare. It is a regressive arrangement that punishes the compliant to compensate for the delinquent. The political economy underlying this dysfunction is visible to all but addressed by none. DISCO board appointments remain instruments of political patronage rather than technical competence. The proposed shift from net metering to net billing further discourages clean energy investment, pushing consumers back.

What must be done is not unknown. Governance of distribution companies must be depoliticised. Anti-theft enforcement must become a genuine law enforcement priority. And the government must accept that raising tariffs without improving service is extraction, not reform. The IMF's objections are not a problem but a mirror. The reflection is uncomfortable.