Just two days after the government announced the ‘good news’ to the public about petrol prices coming down by Rs5 per litre, reports of an increased GST of 17 percent on 140 items has been published. This is part of the mini-budget the government is all set to present in the National Assembly in line with the IMF’s prior conditions. According to the details of the report, tax on 140 items, which include but are not limited to milk, cereals, chicken, cars and gold will be increased by a hefty 17 per cent, practically making everything in the country expensive. The majority of these items after all fall in the category of essential goods.
It is pertinent to note that a day after the Finance Division issued a statement on the reduction of petrol prices in view of the falling cost in the global market, Information Minister Fawad Chaudhry tweeted, “[The ruling PTI] said that in the coming days inflation will start coming down. After petrol products, prices of other commodities are coming down.” Perhaps the Finance Adviser Shaukat Tarin missed out on briefing the federal cabinet on the adjustments included in the minibudget.
The government will, however, still like us to believe that Pakistan is the cheapest country in the world as federal ministers have reiterated time and again, when comparing prices with neighbouring countries. But according to the World Bank report, inflation rate of 11.5 percent recorded in November, is the highest in South Asia. In fact, the State Bank of Pakistan too revised its previous projection for the current fiscal year from five to seven percent inflation rate to nine to 11 percent. It is then a wonder how the government plans to bring down any prices, especially when it is focused on the prior conditions of the IMF mandatory for the revival of the $6 billion programme.
Taxes on cellular services too are said to be increased by 10% to 15%, while subsidies on electricity will be drawn, which will immediately increase electricity prices by up to 95 paisa per unit. In the wake of these hikes, the subsidy plan worth Rs41 billion that the government has made in the budget plus the Ehsaas Ration Programme will not provide relief to the people that the ruling PTI hopes for. The reality is that the country is in need for the revival of the IMF programme and any relief packages are too little too late. The people will have to face the storm waiting for them right at the starting of a new year.
