LAHORE: Governments in Pakistan that hardly manage debt servicing from annual tax revenues cannot be expected to provide relief to the common man. They in fact take loans on a regular basis to run all other government affairs, including defense.
The federal government presents the annual budget in the National Assembly for approval. It gives out details of resources it expects to generate in a fiscal year and the expenditure against these resources. Since over 57 percent of the tax revenue is distributed to the provinces, the federal government remains starved of resources even to run day to day state affairs.
It resorts to borrowing from international agencies, friendly countries and even the commercial banks.
Commercial banks provide short-term loans at market rate. It is criminal on part of the government that does not adjust its expenses according to available resources.
Government of Pakistan has the luxury of possessing many national assets, which it disposes off from time to time. A decade back, the government used to obtain loans globally on sovereign guarantee only.
But now the lenders demand collateral because of which we have mortgaged some airports, motorways, and many other assets to the lenders. Still the government continues obtaining loans though on much tougher terms.
It has not curtailed its expenses and the rulers live like monarchs on public money. Households which this government claims to serve cannot go on borrowing when the cost of living increases.
Little assets that some possessed have long been consumed. These households must live within their means on available resources. They are forced to lower their lifestyle to survive. They have no choice but to recognise the reality.
It is indeed unfortunate that the standard of ruling elite and politicians on both sides of the political divide has increased, while that of the common man has declined drastically in the last two decades.
Each household (at least the middle class, lower middle class, and the poor) prepare their monthly budget on their expected monthly incomes.
Daily wagers who are in large numbers plan their spending daily, making sure they do save a little to cover for days when they cannot find a job.
When the prices increase, these segments of the society scramble to make as many adjustments as possible.
Most of them drop some expenses to remain within their means.
The middle class may postpone some renovations or purchase of new gadgets. They forgo excursion trips. However, they continue consuming quality food, enjoy air conditioning during summer and keep financing the educational needs of their children.
They also do not compromise on health care. The lower middle class is forced to make changes in their lifestyle.
They stop eating outside, the entire family uses one air conditioner for a limited time during summer. They look for a quality school with less fee and compromise on health issues.
The employed poor see all their budgetary plans uprooted with each wave of price hike. As the prices increase, they start consuming most of their earnings on food.
Education, healthcare, and comfortable shelter become secondary issues. The daily wagers even in the best times are not engaged every day. In good times they do get work for 24 days a month.
In bad times, like we are passing through these days, the engagement in work reduces to 12-18 days a month.
Their wages also do not increase as there are more workers seeking job than the demand.
They hardly meet the food expenses from their incomes. But to meet other essential expenses like house rent and utilities they live in a semi starved condition with their families.