Islamabad, Murtaza Mughal, the President of Pakistan Economy Watch (PEW), on Sunday criticized the business community’s calls for lower interest rates, arguing such a move would devalue the rupee and increase inflation.
According to Pakistan Economy Watch, Mughal highlighted the detrimental effects of potential interest rate cuts on the economy, noting they could lead to unnecessary government expenditures and exacerbate financial instability.
Mughal pointed out the widespread distress caused by high electricity and gas prices across Pakistan, leading to bankruptcies and factory shutdowns. While acknowledging the legitimacy of demands for reduced tariffs, he was pessimistic about obtaining International Monetary Fund (IMF) approval for such measures. He underscored the necessity of expanding the tax base, integrating non-tax-paying sectors into the system, and revising the National Finance Commission (NFC) award to safeguard the nation’s fiscal health.
Further, Mughal criticized plans to transfer control of electricity distribution companies (DISCOs) to provincial governments, questioning their capacity to manage these entities more effectively than the federal government. He advocated for privatizing DISCOs, arguing that private sector management could enhance efficiency and reduce losses that are currently passed on to consumers, contributing to corruption and power theft.
Addressing climate change, Mughal lamented the lack of serious commitment from successive governments over recent election cycles, calling for a comprehensive policy to mitigate its impacts. He criticized the inefficiency of provincial disaster management agencies in preparing for annual rainfalls, often resulting in military intervention to manage floodwaters and clear roads. Mughal stressed the need for both immediate and long-term strategies to cope with the consequences of climate change, urging politicians to prioritize national and citizen welfare over political ambitions.