INTERVIEW
IS BUDGET PEOPLE FRIENDLY?

TARIQ AHMED SAEEDI
(feedback@pgeconomist.com)
June 14 - 20, 20
10

While the federal government claims to have presented a pro-poor budget for the financial year starting from 1st July 2010, people are not seeing a respite for the poor from the price rise of necessities of life, fearing rather intensification in the storms of prices of products of daily consumption.

Chairman Consumers Association of Pakistan, Kaukab Iqbal is among those who did not find in the budget any measure for the relief of common persons. In fact, the federal government had overlooked the measures, which if inserted could have possibly lessened the woes of inflationary-hit people, he told Page during an interview. For example, he said, we had recommended the government to slap a complete ban over the exports of meat from the country in order to bring down the exorbitant prices of such a largely consuming product in local markets. However, for whatever reason it did not pay heed. The consumers are compelled to buy products produced abundantly indigenously at prices that are not adequate in any ways because of majorly one reason, he said, "that is the government wants to earn foreign exchange from excessive exports of livestock inconsiderate of local shortages". It is not the only example of irrational exports, he said saying local shortages are often ignored in other products also, giving shortfall-pushed price hike as a corollary, he said maintaining "this is akin to contravening international trade principle".

When his attention was directed towards the duty concession in edible oil announced in the budget, he answered promptly there would appear no difference in the prices of edible oil and ghee, referring to his conversation with an oil importer who said that the concession would be factored in the cost of production; that implies hardly pass-on of benefits to end consumers. It is should be clear in the mind that relief to the masses would alone be possible when consumer products are lightened of the weight of heavy costs-since food inaccessibility is the main cause of mounting poverty rate in Pakistan. "This could be done through flexibility for the imports of consumer products and restrictive exports."

I have not seen such initiative in the budget, he said lamenting the prices of kitchen items are not likely to come down. He has seen no positive developments except increase in salaries of government employees, but reiterating the general statements how many people would take benefits of this increment. He said majority of Pakistanis are non-government employees drawing their incomes from sources, which are inflation-afflicted. Their incomes will be powerless to fight against the unfettered rise in prices of rice, wheat, ghee, oil, spice, etc, he observed. "What budget brought for them [for masses] was nothing." He expressed his scepticism over the implementation of government's order about minimum salary limit in private enterprises far and wide. A nail in the coffin was pressed by raise in general sales tax by one per cent. This was already a regressive tax responsible to increase the prices of end products beyond affordability of common person, he said. Until GST is rationalised, it is daydreaming that prices of consumer products will come down.

When asked about the government's realignment of its focus on the food security and tackling energy crisis in the country, he summed up his viewpoints with a succinct remark: "It is eyewash". Pakistanis have one of the lowest food intakes in the world, he said citing a report by United Nations Food and Agriculture Organisation. Food is secured on its availability at affordable rate.

About distribution of 30 million energy savers, he said government should take services of neutral party to ensure transparency in the distribution of such huge quantity. "My personal view is that government should not waste money on import of lamps." He anticipated irregularities in the import. He criticised the stopgap actions by the government. He said effective measure would have been refusal to increase in electricity tariffs. High cost of electricity has also made the life of common person miserable. Electricity bills consume half of his income. As such, there is no logic of allowing tariffs increment to KESC, he remarked. Nepra has allowed KESC to increase electricity prices by more than Rs5 per unit in periods despite continued electricity load shedding. People point out other inaptness in tariff increment. KESC takes thirty per cent of its electricity from hydropower provider Wapda and therefore critics find no rationality on the part of the company to demand fuel adjustment charges. Similarly, fixed charges can be pursued when uninterrupted power supply takes place. Most importantly, the rise in tariffs cannot be executed until the final judgment by the court. Some citizens' organisations and individuals filed a petition against KESC. The court had asked KESC and Nepra, power regulatory authority, to furnish details on cost calculations in next hearing, which is scheduled someday this week. He doubted the creditability of the report to be presented before the court, observing many anomalies in the audit reports of companies. Calculation is always in company's favour, he argued. And, manipulation is common, he said. All regulatory authorities failed to protect the rights of consumers, and therefore they should be dissolved forthwith, underscored chairman CAP while saying Nepra is patronising KESC. He said parliament should restructure all of them. In Pakistan, unfortunately rights of consumers are not protected, which is why companies take them for right by pushing prices of products at whims, said chairman CAP while talking about the legal backups available to consumers in the country. To a question, he said mainly foods and lifesaving drugs are replete with noticeable consumer rights violations. Yes, certainly, Consumer Protection Act has been much support to consumers in three provinces, he replied when asked can consumer courts thwart the exploitations of consumers. Sadly, Consumer Protection Ordinance could not take the shape of Act in Sindh because of the strong resistance against it from mafias, he said without mincing words. Ninety five (95) per cent consumers in Sindh do not have any legal backing if their rights are flouted.