U.S. CORPORATE CRISIS

E-BANKING: A NEW HORIZON
NBFIS RULES OF BUSINESS: REVIEW AND SUGGESTIONS
GST EXEMPTION ON MORE DRUGS
PASHA-MOST STAND-OFF
THE INCREASE IN UTILITIES CHARGES

 

THE INCREASE IN UTILITIES CHARGES

 

Anger is brewing up slowly amongst the poor and lower middle classes who were in the forefront to welcome the new government

 

From SHAMIM AHMED RIZVI, Islamabad
July 29 - Aug 04, 2002

 

It is gratifying to note that under mounting criticism and public anger, the President has directed WAPDA to put on hold the implementation of the latest increase in its tariff. On persistent pleas of WAPDA the National Electric Power Regulatory Authority (NEPRA) has allowed an increase of 47 paisa per unit in WAPDA tariff against its demand of 88 paisas w.e.f. July 01, 2002.

Taking note of the burden the common man will have to bear because of this increase, the President ordered WAPDA to with hold the decision and directed NEPRA to revise its decision. He also asked the Health Ministry to expand the list of life saving drugs which are to be exempted from General Sales Tax. In view of these development it is expected that the decisions to increase gas tariff by 18 per cent and proposed increase in local telephone calls will also be put on hold.

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 of dozen times and gas and petroleum products on over five accessions since this government took over in 1999. According to survey recently conducted by daily Dawn, petrol averaged around Rs.26 a litre in Sep. 99. It now costs Rs.33.68. That's an increase of 30 per cent. The international price of crude over the same period, went up from $22 to $25.99. The increase is that of 18 per cent. Electricity in October 1999, consuming around a 1000 units of power was charged at Rs.2,800. Consumption of same number of units now costs Rs.4,480. That's a 60 per cent raise.

In 1999, a gas bill for 500,000 units stood at Rs.2,650. The consumption of same number of units now costs 3,300. It means an increase of 23.6 per cent.

The economic managers of the country claim that the rate of inflation has been brought under firm control. Independent estimates and people belonging to the middle class, however, tell a totally different tale. When the rate of inflation was projected by the government at a small 3 (Three) per cent, the price of electricity, gas and oil increased by staggering 46 per cent (worked out on the basis of change in actual rates charged between 1999 and 2002) in last three years since October 99. And the price of three items in the food basket: onion, gram and banana went up by about thirty per cent over the same period. Prices of flour and other pulses, however, have not changed much. Even if one assumes the level of consumption of utilities were static at 1999 level, this segment of household budget alone must have increased by about the same rate as its cost more than 40 per cent. Ignoring the increasing costs of other expenses such as of healthcare and education, the disposable income in the hands of people, would still decline.

The current budget again does not seem sympathetic to general Pakistani consumers. Imposition of 15 per cent GST on edible oil translated within days into Rs.10 or more increase in ghee and vegetable oil price per kg. There is nothing in the financial document that shows any, resolve on the part of the government to address the needs of ordinary folks. This would not only affect consumers choice pattern but depending on their actual financial standing, it will drive many to give up or curtail expenditures that they previously could afford.

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 increased 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 ongoing exercise of downsizing in almost every government and semi-government organizations 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 30 per cent from 17/18 to 10/11 per cent during the last one and a half year. As a result, hundreds of thousand of retired and old people who are living on the profit of their life long saving have been subjected to untold misery as their monthly income has fallen by about 30 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.