- Why make them in the first place?
PM Imran Khan, during his first year, has had to take the business community into confidence over the various prevailing economic issues in the country. This has usually happened when a particular industry has staged protests or used its influence to get access to the PM and complain about his ministers not cooperating with them. Pakistan’s textile industry is one such example that was made promises a year ago when PM Khan had directed his cabinet to resolve their valid concerns. Soon after coming to power the government had revoked a fixed energy price policy for zero-rated industries that included textile, which was strongly opposed by representative associations who successfully got the policy extended. According to APTMA (All Pakistan Textile Mills Association) the policy of reduced energy rates that they were promised has not been implemented by the cabinet fully due to lower levels of government interpreting it incorrectly and not passing on the full benefit to textile companies, primarily in Punjab. The electricity tariff for example was set at 7.5 cents and would be exempt from any additional charges, yet the APTMA claims since June various electricity distribution companies had started charging an ‘adjustment of Rs1.80/unit’.
Whether or not such concessions should apply to only those particular industries that have access to the federal ministers or the PM is debatable, but the fact that the government had promised this relief and is now backtracking is highly problematic. Once such assurances are given by the highest level of government, businesses will prepare their budgets and make commitments to their buyers on the very basis of said assurances. It also does not speak well for the government’s credibility. Only recently the GIDC fiasco unfolded where the government had decided to give a discount on unpaid cess to a handful of companies only to backtrack due to public pressure. This also gives an impression that there are too many power centers within government, each trying to peddle their own agenda and not the PM’s, the IMF in particular given how much leverage they are enjoying at the moment. A government that is making promises it simply can’t keep should not be making those promises in the first place.