Made tough decisions to avoid bankruptcy, revitalize economy: Musadik

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The Minister of State for Petroleum, Dr. Musadik Malik said Friday the incumbent government has taken tough decisions on subsidies for gasoline and diesel, with a particular focus on reviving the national economy and guiding the country out of the financial crisis.

Speaking at a press conference together with Pakistan Muslim League-Nawaz (PML-N) senior leader Shahid Khaqan Abbasi, he said the previous government of PTI granted unwarranted subsidies to petroleum products without budget allocations and approval from stakeholders such as the Economic Coordination Committee ( ECC) and the federal cabinet.

He ended the “land mines” subsidies installed by the PTI government before facing the no-confidence motion against Imran Khan, saying it would add an additional Rs.700-800 crore to the treasury in three months if taxes are included. To draw a comparison, the minister said around Rs528b of expenses were incurred annually to run the affairs of the entire federal government.

In addition, said Dr. Musadik said the previous government also breached the pledges they made to the International Monetary Fund (IMF) on subsidies for receiving financial aid.

“The PTI government had signed a deal with the IMF on the condition that they will raise prices and impose a petroleum levy and a sales tax. But it has violated sovereign obligations to international financial institutions,” he said. The minister said the PTI had done all this to drive the country into default and bankruptcy for political gain, recalling Imran Khan’s recent statements about the country’s strategic assets and disintegration.

dr Musadik said the coalition government, under the dynamic leadership of Shehbaz Sharif, is determined to take care of poor sections of society by providing them with financial assistance.

After careful consideration, he said the government will provide a monthly stipend of Rs. 2,000 to those with monthly incomes of Rs. 35,000-40,000 or less. According to the calculation, he said nearly four out of six families have a monthly income of 37,000 rupees. With the corrective measures taken by the government, the minister expressed his confidence that there will be financial stability in the coming months and the country will be on a consistent path of progress and development. Now, he said, stock markets have started to do well and the rupee is becoming stable against the dollar.

He said the necessary measures had been taken to advance negotiations with international financial institutions, including the IMF. He said the government believes in increasing the productivity of industrial units so that more jobs could be created, apart from keeping the economic wheel moving at a steady pace. Shahid Khaqan Abbasi said there is no country in the world that provides consumers with fuel below the purchase price, but it is the case in Pakistan as even the current government does not collect levies and sales taxes.

He said the reasons behind the rise in fuel prices are global inflation and the devaluation of the rupee against the dollar. “It (increasing fuel prices) was an extremely difficult decision, made after careful consideration. Without this step, the national economy would have collapsed,” he said. Abbasi said the subsidies could not be continued through additional loans from international institutions as it could have an extremely negative impact on the economy and unprecedented inflation.


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