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June 14, 2020

Bloodbath

Opinion

June 14, 2020

There’s a bloodbath going on in our so-called Public Sector Enterprises (PSEs). PSEs are taking on additional debt of around Rs700 billion a year. The government doles out around Rs900 billion a year in so-called ‘grants’. Plus, the government hands out around Rs200 billion a year in so-called ‘subsidies’. That’s an annual burden of nearly Rs1,800 billion.

The 200 or so PSEs are an annual burden of nearly Rs1,800 billion. Now compare that to our annual defence allocation of Rs1,300 billion, our public spending on education of Rs1,200 billion or our spending on health of Rs1,000 billion. Our so-called ‘family jewels’ end up losing more money every year than what we spend on defence or on education or on health.

In 2018, around the time the PTI took over government, PSE debt stood at Rs1,393 billion. In just one year, PSEs took on an additional debt of Rs632 billion. Lo and behold, by June 2019, within one year of the PTI’s taking over, PSE debt had grown to a colossal Rs2,025 billion.

Then there are the so-called ‘grants’. Can anyone please explain to me the almost doubling of grants from Rs478 billion in 2018-19 to Rs831 billion in 2019-20 and to Rs904 in 2020-21? Why did the so-called ‘special grants’ go up from Rs28 billion in 2018-19 to Rs86 billion in 2019-20? Why did the government dole out ‘miscellaneous grants’ of Rs84 billion and to whom? I do admit here that the Rs180 billion allocated to the Benazir Income Support Program is public money well spent.

Then there are ‘subsidies’, a whole lot of ‘subsidies’ – subsidies to the tune of Rs209 billion a year. Just who is getting all these ‘subsidies’? What is this ‘Inter-Disco Tariff Differential’ of Rs110 billion? Isn't it theft, leakages and mis-governance? We have the most expensive electricity on the face of the planet then why is Wapda being given an annual ‘subsidy’ of Rs124 billion?

Wasn't the KESC privatized in 2005? Before privatization, annual subsidy used to be around Rs9 billion a year. In 2019-20, the government paid out Rs59 billion and Rs25 billion 2020-21. Since privatization, the government has given Rs400 billion to KESC in the form of ‘subsidies’. Didn't the government privatize KESC in order to relieve the burden on the public exchequer?

The last time I checked there were 425,000 employees and 1,377 executive directors, non-executive directors and independent directors. How about paying an average of Rs30,000 a month to every employee for a total of Rs150 billion a year and telling them all to just sit at home (as opposed to incurring a Rs1,800 billion loss a year)?

In Singapore, Temasek Holdings runs companies owned by the government of Singapore (under a set of rules). Annual profits at Temasek stand at a colossal $21 billion. We also have the Public Sector Companies (Corporate Governance) Rules, 2013 but neither the PML-N nor the PTI wants to run the PSEs under those rules.

See how rich Pakistan really is. See how we just throw away Rs1,800 billion a year – and then cry out loud that Pakistanis do not pay taxes. Who will stop this bloodbath?

The writer is a columnist based in Islamabad.

Email: [email protected] Twitter: @saleemfarrukh