It goes to former Finance Minister Miftah Ismail’s credit that he took drastic and unpopular decisions to save the country from default. The measures taken by him were necessary, but these made the PML(N) government unpopular, leading many party leaders to criticize their own Finance Minister. Party’s senior vice president Maryam Nawaz distanced herself from measures that contributed to rising prices while suggesting to the Prime Minister to replace Dr Ismail. Party supremo Nawaz Sharif who was concerned about the negative fallout of the rising prices on the party’s electoral fortunes was keen to send Ishaq Dar to take remedial measures to improve the party’s image. Reportedly before boarding the plane for Islamabad Dar reached an understanding with the IMF’s Managing Director over certain time-bound relaxations that were badly needed while coping with the consequences of the natural disaster. Among other things the relaxations included a three-month freeze on existing taxation on petroleum products and fuel cost adjustments in the electricity tariff.
Finance Ministe Dar has announced a cut of around five per cent in the prices of all petroleum products for the next fortnight. The aim is to pass on the relief in prices to consumers resulting frm the fall in world prices. Despite the politics behind them, reduction in petrol prices along with other measures of a similar kind that are supposed to follow also have a humanitarian aspect. Despite their ephemeral nature, the measures are bound to bring some relief, reduce despair and raise hopes. As was expected, the reduction in petrol price has met with skepticism. The price reduction is either being considered too little or likely to be followed by a much bigger hike in weeks to come. Meanwhile the common man’s purchasing power continues to be squeezed. After three weeks of a declining trend, inflation has crept up to 30.62 percent.
There are a whole lot of politically influential groups that have been allowed to remain outside the tax net. As Dr Ismail tried to tax millions of small traders, the PML(N) senior vice-president came to their rescue. There are fears that like the past the PLM(N) government might open the treasury doors to ensure the success of its legislators though allocation of hefty ‘development funds’. This might bring the PML(N) back to power again, but measures of the sort can spell disaster for the economy.