Beggars cannot be choosers

On the insistence of the International Monetary Fund (IMF), the federal government and the State Bank of Pakistan (SBP) did something last week that will deepen the ongoing political and administrative chaos, cripple the economy and multiply the miseries of 230 million Pakistanis. But they had to. Beggars cannot be choosers. The federal government slapped a permanent debt servicing surcharge on electricity to generate Rs335 billion. This surcharge is the cruellest and most unjustified of all government levies. The government has levied it to partly reduce the circular debt of Rs800 billion parked in the state-run company. This, in turn, is part of a much larger body of the country’s total circular debt — Rs2.523 trillion at the end of the last fiscal year in June 2022. Meanwhile, the SBP raised its key policy rate by 300 basis points to a 27-year high of 20 per cent. The central bank also let the rupee shed 7.4pc value in a single day and lick an all-time low of Rs285.09 per US dollar.