Though the federal government is offering huge subsidies to different sectors and for various institutions but that is not generating desired results. There is immense inflation and price hike only because of corruption and irrational distribution. The federal government, for 2011-12, is offering around Rs166.5 billion in subsidies to different heads, including power and food items but at the same it is pocketed by the corrupt mafia.
Economists believe that the subsidies should be ended for good, as they are not delivering any useful results but simultaneously, the government should also end duties on food items and decrease sales tax to five per cent. They said that subsidies have become an outdated way of running business and the government should now do away with it. According to details, the government is giving Rs123 billion subsidy to WAPDA and PEPCO for controlling high electricity bills.
Moreover, subsidy to KESC for 2011-12 is Rs24.5 billion, which is a very huge amount and 90 per cent of power subsidies would benefit electricity thieves. Besides electricity theft, subsidies would go to the pockets of defaulters while inefficient departments would also get shares. Despite the fact that this year the amount of subsidy is far less than those in the last year, they are still of no use. In 2010-11, the government spent Rs396 billion under the subsidies head. The government’s proposal to massively reduce subsidies during the financial year 2011-12 to 0.79 per cent of GDP or Rs166.4 billion, as compared to the revised estimate of Rs395.8 billion, would primarily hit the common man but this can be averted by decreasing duties and taxes on food items. Now, the total amount of subsidies has been slashed by 294.9 billion in the budget 2011-12 and fixed at Rs166.5 billion, as it had been committed with IMF that the total amount of subsidies would not exceed this figure. The subsidy to Trading Corporation of Pakistan (TCP) is Rs4 billion in the year 2011-12 and it is only for sugar imports. Utility Stores Corporation (USC) is receiving Rs2 billion for the Ramadan package. Finance Minister Hafeez Sheikh, in his budget speech, admitted that the rich are also benefiting from the subsidies offered to the poor. PASSCO is getting Rs74 million, which is given only for the pulse Mung.
Shahid Hassan Siddiqui said that electricity theft and line losses are on the rise and no one is paying attention towards it. He said that every year at least Rs52 billion worth of electricity is stolen while the subsidy amount is Rs123 billion. Thus, thieves are benefiting from it. He said that the current government is in office for the last 39 months but it had done nothing for restructuring departments and corporations. “Pakistan Railways has proved to be a disaster and after 39 months, the government has not restructured it, which proves that the government is not sincere in changing the corruption culture,” he said adding that the government can control inflation by waiving off duties from food items and reducing sales tax to five per cent. Hassan was of the view that if the government wants to end the subsidy culture, then it must have to decrease taxes and end duties on food items.
