KARACHI: Noted economist Dr Kaiser Bengali has resigned from the Austerity Committee (High-Powered Committee for Rightsizing the Federal Government) formed by the Prime Minister to reduce government expenditures.
In his resignation letter, he cited the lack of government commitment to reduce expenditures, saying that he was immensely disappointed that of the 70 government organizations reviewed, the Committee recommended privatizing 17 commercial entities and retaining 52 government organizations, closing down only one!
Speaking at the media briefing at Karachi Press Club (KPC), Kaiser Bengali said that the foremost priority of the government has to be to stem the fiscal hemorrhage that threatens to be fatal for the economy and the country. Yet, he lamented that the focus of the Committee has shifted to retaining almost all the government entities but making them more efficient.
He has also challenged the Committee’s recommendation to abolish 150,000 BPS 1 to 16 low-cost positions and privatize Utility Stores Corporation, saying that the entire burden of “right-sizing” was being imposed on the lower income strata of society and that there was no mention of any of the high-cost Secretary, Additional Secretary, Joint Secretary, Director-General, etc. positions that would be eliminated.
He disclosed that in his detailed report to the Committee, he had recommended abolishing 17 Divisions and nearly 50 government organizations that would have reduced a substantial number of BPS 20 to 22 positions and effected annual savings of over Rs. 30 billion in non-salary costs.
He said the economy was in a state of collapse and has been surviving on a debt ventilator. Now, however, even IMF, as well as friendly countries, was reluctant to extend any further loans and the privatisation process has stalled as no one was bidding for State-owned Enterprises.
Moreover, a number of foreign investors are leaving the country – a process of reverse FDI. At the other end, he said that family budgets had also collapsed and cited the cases of two family suicides in Punjab in one day on account of poverty.
He also criticised the highly aggressive tax mobilisation efforts – using methods bordering on extortion – saying the economy is structurally weak and cannot generate more revenues. He repeated that the answer to addressing the large budget deficit lay in reducing the government’s current expenditure, including non-combat defence expenditure. Citing 2023-24 revised figures, he said that total gross tax and non-tax revenues were Rs. 12 trillion and total current expenditure was Rs 14 trillion, leaving a gap of Rs 2 trillion – which constitutes the target for expenditure reduction.
He revealed that, come the last date of filing tax returns, he will submit his returns one day late in protest against the government’s non-serious approach to arresting the fiscal profligacy eroding the economic base. He called upon all tax-paying companies and individuals to do the same.
Copyright Business Recorder, 2024