Despite all tall claims of
improvement in economy, the fixed income group, salaried class and the
common man has received no relief
From SHAMIM AHMED
RIZVI
Islamabad
June 10 - 16, 2002
Apart from the daunting challenges on the external
fronts the government of Gen. Musharraf is faced with two serious
issues on the domestic front which calls for immediate remedial
measures. These two challenges are rising unemployment and growing
inflation and poverty. The rise in prices of kitchen items has not
only made the life of poor and low fixed income group harder, but has
also fed from lower middle class to upper middle class.
This is a fact that despite all rhetoric and tall
claims of improvement in economy, the fixed income group, salaried
class and the common man has received no relief. Instead they have
been burdened with constant periodical doze of hike in the prices of
utilities with its adverse effects on cost of living. Electricity
tariff has been raised by over half a dozen times and gas and
petroleum products on over five accessions since this government took
over in 1999. In May 2002 alone the prices of electricity and
petroleum products were revised upward twice. Now there are reports
that the prices of oil, gas, electricity, telephone are likely to go
up by 5 to 20 per cent in the next budget.
It is a harsh reality that the silent majority —
which Gen. Musharraf claims to be his supporters — have been treated
most callously by the present government. The people are loosing
patience and now widespread resentment is gaining ground against
government policies allowing increases in the tariff of utilities like
gas, electricity, petrol and telephone charges. This has partly led to
increase in the prices of large number of essential food items making
the life of common man more miserable during the past two years. The
agony of this scenario has been multiplied by the onging exercise of
downsizing in almost every government and semi-government organization
where again the majority of the victims belong to lower classes.
Anger is brewing up slowly amongst the poor and
lower middle classes who were in the forefront to welcome the new
government from whom they expected some relief for those who were
finding difficult to survive in their honest income. Even Nawaz Sharif
government was scared of public reaction and hesitated to allow
increase in prices of petrol and gas, levy of GST on electricity
bills, increase in local call charges and line rent which directly hit
poor and lower middle classes. All these unpopular decisions have been
taken by the present government which thinks itself immuned from
public reaction.
As against this government has found many reasons
to be soft on bank defaulters and holders of tax evaded black money in
billions. Government whitened black money to the tune of over Rs. 100
billion against a payment of just 10 per cent while honest tax payers
had been paying upto 25 per cent of their income as taxes. Bank
defaulters are being treated softly because of the consideration of
revival of economy. Wealth tax has been abolished altogether to favour
the moneyed class. As against this rates of profit on small savings
has been reduced by over 25 per cent from 17/18 to 12/13 per cent
during the last one year. As a result, hundreds of thousand of retired
and old people who are living on the profit of their life long savings
have been subjected to untold misery as their monthly income has
fallen by about 25 per cent while the costs of living is constantly on
the rise. Adding salt to their wounds these people are told that it
was necessary to reduce the rate of profit on their savings as the
government was keen to advance loans to industrialists at reduced rate
of interest to promote its economic revival programme.
The poor and the salaried class was getting buried
under the heap of rising cost of utilities, and direct and indirect
taxes, which have left substantially less to pay for eatables,
education, healthcare, clothing, etc. Amid rising cost of living and
increasing unemployment those who were unable to bear the burden,
either committed suicide or were being sucked into criminal
activities. Many of the low-income families have withdrawn their
children from educational institutions.
The government has embarked on a vigorous programme
to increase its revenues to meet its ever-increasing current
expenditures. It is looking into every aspect of public life to
explore new venues that could produce more revenues through new
taxation. The public has no escape but to submit meekly to the wishes
of a voracious administration.
The successive government have utterly failed to
fill the gap between revenues and expenditure. More taxation is not
the answer. People are already overtaxed. Any more taxes or hike in
prices would cripple them economically and the government would be
left with holding tax notices but no taxpayers.
Yet the government claims that inflation is under
control and prices of only few items have increased. Such
announcements completely ditached from reality, only add salt to the
wounds of distressed class of consumers. Even the governor State Bank,
in his annual report recently released has conceded that official
inflation figures are losing public creditability.
As far as unemployment is concerned, observations
suggest that the situation has deteriorated. No official figures are
available about this very critical indicator. The government is silent
on the issue as to how many new jobs have been created during the last
two years. Ironically, press reports suggest that the government is
planning to lay off more people. Will this help the economy to come
out of the heavy smog. Certainly not. The export or agriculture-driven
growth is likely to be mitigated by the heat of inflation, growing
unemployment and falling disposable income of spenders, not to mention
the hard-hit segments of the population — the salaried class and the
poor.
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