Advisor to Prime Minister on Finance, Dr Abdul Hafeez Shaikh here on Monday presented six-point formula to mitigate country's energy crisis on short-term basis while advising for adopting a comprehensive medium-term strategy to end power crisis.
Delivering a lecture after inaugurating NUST Business School (NBS), at National University of Science and Technology, Dr Hafeez Shaikh stressed the need for utilising the existing energy capacity to generate more power saying that there was need to identify the capacity of generating energy through gas. He said that there was capacity of generating addition 950 megawatt of electricity through gas, however, added that the gas sector was also facing similar problems as the power sector.
Hafeez said that the IPPs should be paid their dues to encourage them continue operation for electricity generation, which he said would help mitigate power crisis in the country on short-term basis. He also underlined the importance of energy conservation and end to power wastages adding that the performance of electricity distribution companies also needed to be improved to save about 30 percent electricity wasted due to transmissions losses.
And finally, he said there was also need for developing better and predictable load management system to save people from suffering. He said that on medium-term basis there was need to shift towards alternate power generation by utilising various resources.
Hafeez Shaikh told journalists that International Monetary Fund (IMF) may allow Pakistan delay raising power tariff from next month provided it ensures to get $900 million loan from Asian Development Bank (ADB) and the World Bank (WB). He said that Pakistan's power generating sector was fuel based which is expensive in the international market, so creating financial gaps if electricity is provided on same tariff from next month. He said that discussion would be held with IMF to delay the power tariff hike on the basis of loan to be provided by ADB and WB.
Shaikh, who is leaving for Washington on Tuesday, said that IMF would like Pakistan to raise power tariff but there are other players like ADB and WB who have their role to play. For the overall economic uplift, Hafeez Shaikh stressed the need for human development to take country forward saying that the countries that took care of people have gone ahead and the others were still lagging behind.
"You cannot have underdeveloped people and a developed country," he remarked adding that human development and education were imperative to lead towards economic prosperity. Besides, the advisor added that another factor that helped nations to go ahead was the capability to do business with others adding that countries that have succeeded in exporting their products have gone ahead.
He also highlighted the importance of striking balance between role of government and private sector initiatives for economic development. Citing the example of Communism in Russia, he hinted that neither the government nor the private sector could alone succeed to include the country into the list of developed nations.
To a question about Value Added Tax (VAT), Dr Shaikh said that inability to mobilise country's own resources was one of the historic failures. He said that county's tax to GDP ration was still in one digit, which needed to be improved. He said that the VAT is being depicted as some dangerous object, saying that there was need to communicate, talk and discuss this mode of taxation for better results.
He said that VAT would benefit the people who are already paying taxes saying that it would ease the burden of those paying tax and bring into tax net to those who do not pay taxes. He said that VAT was a platform for bringing larger number of people into tax net.
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