Urgent reforms

By Mansoor Ahmad
March 05, 2024
Then Prime Minister-elect Shehbaz Sharif addresses the National Assembly session on March 3, 2024. — PID

LAHORE: Finally, the government has been formed, but the national assembly is still polarized. Hopefully, sanity would prevail after a while. We need immediate and transparent reforms to ensure better days two years later.


The first two years of this government are crucial that would set the tone for a better or further bleak future. A day after the formation of the government, we are still seeing the ruling coalition recommending public-appeasing policies. We cannot give away power for free to any consumer segment when the cost of power to the government is very high.

The price is high mainly because of mismanagement, corruption, and power theft. The new government must address these issues on priority, transparently, and without any fear. The issue of high power rates would be automatically resolved. A subsidy given on the power tariff to any segment of consumers now would have to be funded by further loans, which we cannot afford.

Price control through government subsidies is not an answer to this painful problem. The government must take steps to reduce the cost of doing business besides strictly monitoring the hoarding of commodities and eliminating middlemen from the agricultural sector.

With fertilizer, pesticide, and seed prices reaching exorbitant levels, one cannot expect grain rates to decline. The government must suspend launching further development projects until the existing ones are completed. The amount thus saved could be used for doling out subsidies transparently only to the deserving.

The practice of providing subsidies to the entire population must stop. There is a 40 percent population that is living below the poverty line. Only that population could be facilitated through subsidies, but with conditions. The beneficiaries must give back to the state for this subsidy. It could be enrolling their children in schools or doing labor for the cleanliness and maintenance of infrastructure in their locality or village.

The new government must generate resources through real savings. The salaries and perks of the ministers should be abolished. The caretaker Punjab government operated without drawing any salary or perks. Even the vehicles should be denied to the ministers, and then the Prime Minister may have several dozen ministers in his cabinet to satisfy coalition partners. The expenses of all high offices should be practically slashed by 50 percent and deposited in subsidy accounts.

The loss-making public sector enterprises must be privatized in the first year of this government, and the amount saved could be used for public welfare. Privatization would also save over a trillion rupees of the loss that these PSEs suffer every year.

Generating additional resources would be beneficial only if expenses are curtailed. The government could increase the salaries of government servants up to 16 grades, and for the rest, there should be no salary increase this year. In the same way, the government may increase the pension of those drawing less than Rs50,000 per month, but no increase should be announced for the rest.

The corporate tax rate must be increased by 5 percent, and bank tax rates must be increased by 5 percent above the normal corporate tax rates. Do not touch the salary class tax rate for persons drawing up to Rs100,000. Non-filers should be asked to pay the existing road user tax per month or get registered in the tax net. We should go to any extreme to force the tax evaders to come into the tax net.