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Inflation at its peak in Pakistan

"Tax rates are so high that it is getting difficult for consumers to consume and for manufacturers to provide products at a reasonable price"

Inflation is the rate of rise in prices over a given period of time. It is usually a wide measure, like the overall increase in the cost of living in a country. Pakistan is witnessing an inflation rate of about 10.9 percent as against the recommended 2-3 percent. Being one of the biggest importers of energy and now food as well, the country is facing price variation which is fueling inflation. The situation is becoming worse day by day as inflation is at its peak in the history of Pakistan. From food to clothes to electricity to cars, every thing has become double of its price in just past 4 years. Life of the poor and the middle class has become miserable as they are forced to live from hand to mouth. The kind of inflation we are going through is demand-pull inflation, where a shortage of a product or service becomes the cause of increased demand, and as a result, its price increases.

The annual inflation rate in Pakistan accelerated to 11.5 percent in November 2021 from 9.25 in October. It was the strongest inflation rate since Feb 2020, mainly pushed up by charges of transport (24.4 percent vs 14.4 percent in October); food & beverages (10.5 percent vs 8.3 percent); housing and utilities (14.8 percent vs 12 percent); restaurants & hotels (11 percent vs 8.3 percent) and furnishings (10.4 percent vs 9.2 percent). On a monthly basis, consumer prices went up 3 percent, the most since July of 2008, following a 1.9 percent increase in the previous month.

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The current government has poorly failed in providing the citizens with the best basic necessities such as affordable residence, top-class education and health. Also, everyone wants to know the basic causes of this high inflation rate in Pakistan but not a single representative of the government is ready to take the population in confidence. Prices of daily consumable items like sugar, flour, oil, tea, pulses, vegetables, and meat are increasing with every single day, that it is too difficult for a common man to both ends meet. Flour price per kg has been increased from 55 to 75 (114pc), sugar from 55 to 115 (110pc), oil/ghee from 140 to 340 (142pc), rice from 80 to 160 (100pc), pulses from 113 to 250, mixed vegetables from 45 to 110 (144pc), milk from 90 to 130 (44pc), yogurt from 100 to 220 (120pc), eggs from 120 to 180 (50pc) and mutton from 740 to 1500 (103pc). Moreover, electricity price per unit has gone up from 2 to 6 (200pc) for life-line consumers, and from 8 to 24 (200pc) for others. Medicine prices have also increased in the range of 250pc to 400pc.

Another unprofessional step taken by the current government is the steep rise in interest rate. The policy rate has almost doubled within a period of a single year, from around 6pc to 12pc and subsequently to 13.25pc, where it was kept for nearly a year. It is claimed by the State Bank of Pakistan (SBP) that it was targeting headline inflation as well as forward looking policy to remain ahead of inflation. These two things resulted in a massive rise in interest payments, which jumped from Rs1.3 trillion in 2017-18 to Rs2.6 trillion in 2019-20, in just first two years of this government. The shift led to around 5pc real interest rate for about one-and-a-half years. This alone gave an estimated benefit to the banks and financial institutions of Rs450 billion during this period. High interest expenditure resulted in increased fiscal deficit which created a compounding effect of increase in public debt.

In the history of this country, half of the governments were democratic, and half of the times, dictators ruled here. By taking a closer look at both, we can easily say that the dictatorships were much better as there was less crime rate, more development rate as well, and rulers thought about the state and the people first. Also, the major development of the country was the construction of four major dams including Mangla and Tarbela Dam. Compared to democracy, where after every 4 or 5 years, a new government comes, fills up the pockets of its minister participants, and leaves the country with even more dept than the previous ones. Still, our system is being governed by unprofessional politicians which do not have any knowledge or expertise on how to run a country, how to make it prosperous, how to get it rid of inflation and debt. They are always just blaming each other for the debt and complete their tenure by doing this. As a result, the country has been pushed more or less to stone age.

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The next thing is taxation on every single item or product in the market. Tax rates are so high that it is getting difficult for the consumers to consume and for manufacturers to provide the product at a reasonable price. We Pakistanis pay taxes on everything we purchase from bread to airplanes, but all the time, government representatives comment that Pakistanis do not pay taxes. Also, they are taking loans from IMF at even higher rates. What is the major reason that they cannot speak about it and tell the truth about what the IMF wants from them? What are the clauses of the IMF agreement and who is going to pay back the loan? After completing the tenure, politicians just fly away from the country and spend the rest of their lives there. But the people of the country have to live their stressful life. The people of Pakistan have to wake up to draw their voting system to generate healthy momentum in the country. In this regard, the practice has been ongoing for the previous 52 years but the country is still expecting the supersonic progressive things which are yet to come up for the innocent people of the state. In these all-miserable concerns, chief justice of Pakistan must play his progressive role to save the country by taking suo-moto action.



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