Daily Times

The country’s economy is not faring well and on course for a drastic slowdown, but amid this doom and gloom and public screams, powerful lobbies and mafias in the country are sucking the most of the wilting economy.

The Pakistan Tehreek-e-Insaf (PTI) had always inveighed against the lobbies and mafias that influence the economic policies of the government, and vowed to rein them in after coming into power. The PTI leadership reiterated these claims after taking charge; however all claims blew away and hopes dashed when the federal government gave in to these mafias and facilitated them to exploit the situation.

The PTI leadership considered tax evaders and benami property holders as strong mafias, who are “plunderers” and a drag on honest taxpayers, and resolved to crack down on them. The PTI also strongly criticised the Pakistan Muslim League-Nawaz (PML-N) government’s tax amnesty scheme introduced in 2018, calling it a ploy to “fool taxpayers” and “a gift to looters”. However, later, the PTI government announced a tax amnesty scheme for tax evaders and benami holders and offered them an opportunity to whiten their undeclared assets at home and abroad, which is contrary to its own claims and demoralising for existing taxpayers and tax return filers.

Under the pressure of influential real estate sector and auto industry, the government overturned the previous government’s decision and allowed non-filers of tax returns to purchase vehicles and properties. The previous finance minister, Miftah Ismail, had claimed that the PML-N government resisted the pressure of the auto industry and did not allow non-filers to buy vehicles; however, the PTI government succumbed to the pressure. On the other hand, the auto industry in Pakistan was given a smooth ride to increase prices of vehicles on the excuse of devaluation of rupee. The government made no checks and balances and did not evaluate the impact of the devaluation on the prices of raw material for the auto industry. The pharmaceutical industry also exploited the situation and increased prices of medicines three to four times following the devaluation, adding to the people’s woes.

The PTI leadership considered tax evaders and benami property holders as strong mafias, who are “plunderers” and a drag on honest taxpayers, and resolved to crack down on them

In an effort to curtail fiscal deficit, the federal government abolished subsidies and increased prices of oil, gas and electricity, but surprisingly the sugar mafia succeeded in getting subsidy from the government. The government gave in to the demands of sugar barons, who have the backing of PTI stalwart Jahangir Khan Tareen, and allowed them to export 1.1 million tonnes of sugar by waiving conditions that a cabinet body had earlier imposed. So the PTI government also succumbed to the pressure, like its predecessor, exerted by the influential sugar barons who had sympathisers in each political party.

The government raised the interest rate, which benefitted banks, since they did not increase the deposit rate accordingly. The government also could not keep tabs on punters, who made a killing in the currency market due to sudden rupee devaluation.

The PTI government’s second mini-budget – presented in January – was well received by stockbrokers, since it offered them some major concessions. The latest amendment to the finance bill proposed to abolish the Advance Income Tax under Section 233 A of the Income Tax Ordinance, 2001, which was a longstanding demand of the stockbroker community. The concession only benefitted stockbrokers and not investors, and as a result, the stock market did not perk up.

It appeared the PTI government, instead of restraining the powerful thriving mafias, incentivised them, or let them manipulate the situation.

The writer is Islamabad-based journalist and analyst