Pakistan Industrial and Traders Associations Front (PIAF) has strongly reacted to Rs 1.04 per unit increase in power tariff, saying this would put an extra burden on the crisis-ridden industrial sector. A joint statement issued by the association office-bearers on Wednesday lamented that a large number of industrial units have closed down due to acute shortage of electricity. Pakistan, it said, had already lost a number of foreign orders and the increase in power tariff would make our goods uncompetitive in the international market.
According to a conservative estimate, more than 300 textile mills have closed down in Punjab's industrial hub, Faisalabad, alone due to power shortages. Cottage and auxiliary industries are the worst hit. Fifty percent of the power loom units, which provided employment to an estimated 2 million skilled and unskilled workers, have gone out of business. Notably, most of the medium-sized enterprises, too, depend on auxiliary industry for various components.
These people can ill-afford to have generators of their own to tide over 'loadshedding', with the result that every power outage brings work to a standstill, badly undermining their ability to meet production orders in a timely fashion while they still have to pay salaries and meet other expenses. Failure to comply with production order deadlines means lost economic opportunities. Increase in power rates is likely to push an even greater number of small-scale, even medium-sized, industries towards closure, aggravating concomitantly the employment situation and the problem of poverty.
Our price of energy, one of the factors of production, is among some of the highest in the world. Supply interruptions further add to the cost. The government, of course, is under donor pressure to increase power rates by removing subsidies with a view to improving its revenue generation. If it tries hard enough it can mitigate some of the effects through a better management and conservation policy.
PIAF, for instance, has rightly emphasised the need for the government to control line-losses through theft and poor maintenance that vary from 25 to over 40 percent in different parts of the country. Also needing control is the policy to provide 24/7 supplies on concessionary rates to privileged sections of society. Certain government departments provide electricity to senior officers for a small flat rate.
The common tendency being to make liberal use of such concessionary facilities, people are known to keep their air-conditioners running day and night for a monthly bill of Rs 5,000 only. There is an obvious need for the government to take urgent steps to stop excessive leakages and misuse so that people engaged in vital economic activities are not burdened with excessive bills and supply shortages. Needless to say, it must also undertake other measures - short, medium as well as long-term - to ensure economic activity does not come to a halt due to uncertain and high priced power supplies.