Just days before the government increased the price of petroleum products to a record high level of up to Rs12.03 per litre, the Prime Minister Office sought the release of Rs200 billion to offset the impact of inflation on the lower- and middle-class of the country. According to media reports, the premier held meetings with the finance minister to seek the release from the said amount in the budget. However, owing to the stringent IMF conditions and lack of fiscal space in the budget, no decision has been taken yet. While it is unclear whether this amount would be released from the budget or funds from the Public Sector Development Programme and others would be diverted for it, it is rather clear that PM Imran Khan is under pressure following the rising inflation in the country.
The inflation last month was recorded at 13 percent and the recent hike in the electricity tariff as well as POL products will only further put pressure on the masses already struggling to make ends meet. In the wake of this, such an ‘appeasement’ approach of PM Imran-led government is not going to make it gain back the popularity it once enjoyed. The financial crunch in the country has gravely burdened the lower and middle strata of the society, while the federal ministers have only asked them to be patient, claiming the inflationary pressures are ‘temporary’.
This is not to say that global oil prices have not increased or the Coronavirus pandemic hasn’t adversely affected other countries, but the fact remains that the incumbent government has also done little to nothing to devise economic policies that would offset the inflation. Huge sums of funds have been used to make new constructions projects, which could have otherwise been used to invest in existing industries to reduce the import bill. Moreover, the ruling PTI in its manifesto had promised to create 10 million jobs during its five-year term. But not even a million have been created even in sectors it has heavily spent on. Case in point: housing and construction sectors. The government lacks foresight and the argument of being ‘new players’ in the power corridor can no longer hold weight. It must realise that Pakistan’s is a price spiral market and with the month of Ramazan nearing, the food inflation would further witness a surge, and no ‘relief package’ could offset it. While external factors cannot be controlled, controlling internal factors, such as, hoarders and the active black marketers, could provide some respite.