Senate wakes up
Dealing with terrorism is clearly proving difficult for the sitting government, but the economy, it seems, is not its cup of tea either. The decision of charging five percent additional GST on petroleum products rightly came under severe criticism in the Senate the other day. And Dar sahib, as usual, was found wriggling from one argument to the other to defend his position. Things will not get much easier with the new week, when he will have to justify the increase that bypassed parliament, especially, as PPP Senator Raza Rabbani pointed out, the Supreme Court has already declared that it was not the role of the executive to levy taxes, but rather the domain of the parliament.
Interestingly, even in the Senate Dar wanted appreciation for reducing petrol prices repeatedly over the last year. The fact that the downward revision would not have been possible without the global collapse in Brent crude, not to mention the intense pressure of PTI’s dharna, still seems lost on the government. Then there was the embarrassing admission that without the additional levy the FBR would be compromised and development funds diverted to debt relief, as usual. The finance minister did not mention, of course, that the FBR falling short of its target reflects poorly on the government, which should then foot the bill, instead of burdening the people.
The government has developed a habit of taking credit for good news, even when it has no control over exogenous factors. It continues to take credit for the fuel price reduction, even though it had not link with it. Not long ago, Dar claimed stabilising the rupee, even though the stability came from an external injection, with conditions, which was little more than Saudi money parked in our central bank vaults. Dar did not explain how it reflected improved economic performance. Perhaps he should explain the indulgence in indirect taxation, despite promising not to during the election campaign. It would be wiser to rollback this option and work on raising revenue in the right manner.