Caretaker Privatization Minister Fawad Hasan Fawad on Monday said that state-owned enterprises (SOEs) are devouring a staggering Rs. 800 billion annually from public funds.
Discussing the SOEs’ dismal state of affairs at a seminar organized by the Policy Research Institute of Market Economy (PRIME), the minister disclosed that these entities chewed up a staggering Rs. 2.542 trillion from 2018 to 2021 with the federal government compelled to provide grants, subsidies, and loans to 207 such institutions.
Fawad stressed the need for bureaucratic reforms and “surgical interventions” to rescue these beleaguered entities from financial ruin.
The minister lamented critical flaws in Pakistan’s tax system and banking sector. He said that tax officers had no role in 93 percent of the overall tax collection in Pakistan, calling it a systemic failure. Meanwhile, despite rising unemployment, banks are raking in over Rs. 1 trillion annually.
Fawad also called attention to the lax oversight from the International Monetary Fund and World Bank, claiming that these financial bodies do not care about the banking regulatory framework. He further argued that private institutions had benefitted from subsidies for well over a decade.
In his final remarks, the caretaker minister emphasized the urgency of privatizing government institutions to alleviate the burden on the state. He urged voters to critically assess the eligibility of candidates in the upcoming elections, suggesting that the fate of SOEs lies in the hands of the electorate.