Energy costs & industrial future



The 2019 was a very tough year for the masses and the business community. The painful year has passed and the situation may become a little better in 2020 but some challenges remain which should be tackled. The rupee should be strengthened by five percent to improve situation and plight of health, education and industrial sector should be noticed.

The government has reduced current account deficit by 75 percent but at a great cost of compromising production. Excessive devaluation of rupee left semi-finished and raw material costly which reduced industrial activity substantially, the country lost a competitive edge in export markets, while many lost jobs.

The reduced the real income of masses and increased inflation acted as a double-edged sword to hurt masses as the price of edibles witnessed an increase of over 20 percent. Exchange rate erosion, 13.25 percent interest rate, unrealistic tax target and policy of holding back refunds damaged the economy while the prices of petrol, gas, and electricity were upward revised dozens of times putting extra burden of trillions of rupees on the masses facing runaway inflation.

The power sector receivables continue to rise while the government is relying on raising tariffs to meet the IM’s condition regarding cost recovery while the general public and productive sectors bearing the cost of the sector’s inefficiencies and mismanagement. Failed institutions must be sold while the budget allocated for health and education should not be used for other sectors as it is hurting the masses.

The government should speed up reforms in the energy sector so that the economy can progress in a sustainable manner. The infamous circular debt has reached Rs1.7 trillion and it will surpass Rs two trillion by the next year posing a serious threat to the economy. Rising prices of electricity and gas will jeopardize industrial future of the country, therefore, mismanagement and inefficiency in these sectors should be tackled.


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