Islamabad: Consumer Rights Commission of Pakistan (CRCP) is disappointed with the federal budget as it is devoid of any consumer welfare component and offers no relief to the hard-hit poor consumers as a result increased prices of utilities. It makes no provision for any meaningful increase in social sector spendings, especially in health and education, besides failing to give immediate raise to the government employees in their salaries. In overall terms, it is a status-quo budget without including any innovative measures to deal with the multi-dimensional crisis faced by the country. CRCP, however, welcomes, freezing of defence budget, reduction in import duties and the commitment of government to pursue its documentation drive. In the meanwhile, it is important to focus on consumer education; without which effective implementation of GST will be difficult.

Government employees have not welcomed the way their salaries have been raised. The announcement of 50 percent increase in their pay scales, which will be effective from December 1, 2001, is too meager in view of the high inflationary effect over the last several years. CRCP feels that the raise should have been affected immediately. It also needs to be kept in mind that the government employees will actually get 18 to 30 percent increase, depending on the interim raise that they got since 1994. It is also a disappointment to defer increase in the medical, conveyance and house allowances without even giving any specific dates for that.

The increase in pension scale to t he tune of 5 to 15 percent is not enough. The retired public servants are more vulnerable to increasing cost of utilities and others goods and services. In a situation where social security systems are virtually non-existent, there is a need to protect the vulnerable and the marginalized but the budget provides no effective measures in this respect.

The Finance Minister Shaukat Aziz stated many times during his budget speech that the budget was made investor-friendly, but he failed to mention even for once about the need of consumer protection. The major thrust of the budget rested on restoration of investors' confidence. Promotion of business must be welcomed but it should be with in a broader framework of consumer protection. CRCP feels that if the consumer interests are excluded, then what is the business-friendly budget meant for? CRCP believes that business, government, and consumers are the three stakeholders with regard to any market activity.

They are essentially interwoven and, therefore, a comprehensive approach to the preparation of budget is essential to protect the interests of all stakeholders.

CRCP finds no justification of the statement of the Finance Minister in which he said that prices of food items remained stable during the last year. The fact is that tariff of gas, electricity and petroleum was adjusted upwardly on several occasions which led to increase in the prices of other commodities as well. As in the past, the present government has also failed to put adequate emphasis on consumer protection.

CRCP maintains that the inept management of public sector monopolies is the principal source of inflation in Pakistan. The state has been unable to control waste and theft, but prices of utilities are raised to the level of extortion. It ultimately leaves consumers helpless who have to pay sky-high utility prices. It fears that the current fiscal year may prove the year of mini- budgets like the last year. During the previous year, mini budgets kept on jolting consumers. The power tariff swelled four times and gas prices hiked thrice. The petroleum prices were also revised upward for three times.

Gas and electricity are major industrial inputs. The increase in GST rate from 15 percent to 20 percent on a range of raw materials would ultimately lead to rise in prices of products. Imposition of GST on ghee and cooking oil is totally unjustified, given that these two items are used by the rich and the poor alike. Steep rise in their prices have priced Pakistani products not only out of the international market, but in the domestic market also.

During the last fiscal year, daily domestic production of crude oil increased by 1.6 percent. The increase in its price makes a sense because it is linked with the international market price structure. But the gas tariff was increased many times despite the fact that its domestic production had increased to the tune of 6.09 percent.

The mode of public expenditure has its serious implications for the citizens. CRCP was more concerned with the total expenditure on health department, which is estimated to be only 0.7 percent of GNP, and on education, it falls in the range of only 2.06 percent of GDP. It said these figures were testimonial to the fact that consumers are not on the priority list of government. The marginalized segment of our population has not even access to basic education and health because so less is spent in these sectors. The government claims to provide free health facilities in public hospitals, which cannot provide Medicare either due to corruption in distribution of medicines or due to lack of funds.

Our tax policies have been simply to pile up new taxes while it is clear that no one is paying the already levied taxes. The crisis of governance has never enabled the government to achieve the set target in revenue generation. It says that government has had ever adopted a pragmatic approach to generate
revenues. Instead of collecting the target revenue through effective policy implementation, it lays its burden of expenditures on marginalized consumers in form of increased prices. Government has estimated that Rs.50.60 billion will be generated from the new taxation measures, Rs.5 billion from the recent petroleum price adjustment and Rs.3 billion from sealing down GST-subsidized electricity prices.

CRCP appreciated the reduction in duties on imports, as it would help stabilize prices. It also cherished the strategy adopted on water-related projects. It suggests that government should not only preserve water storage places but also divert attention to ensure the supply of clean water to every citizen.