Austerity plan

Centre and provinces concert measures to preserve fuel

It might seem that the radical measures being taken by the federal government should do something, but it should be recognized that while some measures may make a difference, others sre symbolic. For example, the stopping of Cabinet members’ salaries for two months and the 25 percent cut in Parliamentarians’ salaries is basically meant to show solidarity with the people, rather than conserve fuel in any meaningful way. Another gap in the plan is that there is no estimate of the fuel that is to be conserved. The closure of educational institutions for two weeks is a more draconian measure than shifting classes online, which has been done for institutes of higher learning. A four-day work week for both government and the private sector, has been accompanied by an instruction to shift half of their staffs to work from home. That seems to burden employers, who will be expected to stump up full salaries. However, the office closures seem to be voluntary, because the government has no real mechanism to ensure compliance.

Meanwhile, the official estimate is that there will not be much impact, as has been conveyed remotely to the IMF review team in Istanbul by the government. The government seems to feel inflation will remain in single digits, even though the global oil price has begun to fluctuate wildly, reaching $119.50 a barrel in Monday’s trading, before falling back to around $82. However, it began climbing at a slower pace on Friday, when it reached $88. That can only mean more pain for consumers, as the prices of everything go up. The KP government, probably for partisan reasons, has come up with the idea of insulating motorcyclists from the impact of the price hike. Details of the scheme are not forthcoming, though it may be remembered that a similar scheme by the federal government was shot down by the IMF. Apart from the issue of financing it, there would also be the problem of making sure the scheme was not exploited by owners of four-wheelers.

Prime Minister Shehbaz Sharif was right, while announcing the austerity measures to concede that the recent petrol price hike would hurt consumers, but he was also right to say that this was inevitable. Indeed, the way things are heading, prices may well go up even further. By taking the steps it has, maybe the government will ensure that consumers do not have to face the pain of fuel shortages.