Govt decides to shut markets at 8pm under ‘energy conservation plan’

ISLAMABAD: Minister for Planning, Development and Special Initiatives Ahsan Iqbal on Tuesday announced that the federal and provincial governments have unanimously decided to shut markets by 8pm across the country under ‘energy conservation plan’, ARY News reported.

The federal minister made the announcement while talking to journalists after a meeting of National Economic Council (NEC) chaired Prime Minister Shehbaz Sharif approved the estimated budget figures.

“The NEC has approved an energy conservation plan under which shops and commercial centres would be closed by 8pm,” he announced, noting that energy has become a huge challenge for Pakistan due to global prices.

“Saudi Arabia has cut down oil production by one million barrels, which poses a risk of oil prices rising to $100 per barrel,” he said, highlighting that if the country continued to rely on fossil fuel and oil for its energy needs, “our economy will remain vulnerable”.

In this regard, the planning minister said, one of the measures that the government wanted to implement pertained to energy conservation.

He pointed out that the federal cabinet had vowed to enforce decisions under a National Energy Conservation Plan last year. “However, there was no representation of provinces in that meeting,” he said.

“But now we hope that provincial governments will ensure the implementation of the energy conservation package that has been approved today,” he added.

Giving details of the plan, Iqbal said the steps for energy conservation were closure of shops and commercial centres by 8pm, switching to LED lights and upgrading geysers to make them more energy efficient. “Such steps could help the country save up to $1 billion annually,” he added.

The minister also said that another decision taken regarding the energy sector was to promote green energy. “Projects of solar, wind and hydel energy will be promoted and we will not introduce any new project based on imported fuel,” he said.

‘Development spending’

Ahsan Iqbal noted that the government also approved an estimated 3.5 precent GDP growth target for its 2023-24 financial year budget. He said the growth target was realistic. “We’re taking those choices which take the country toward stability,” he said.

Ahsan Iqbal did not disclose other budget targets except for the GDP and development spending which he said will be Rs1,150 billion ($4.02 billion).

Talking to journalists, Iqbal said that the National Economic Council (NEC) proposed the Annual Development Plan (ADP) for the upcoming fiscal year (2023-24) with a total outlay of Rs2.709 trillion.

“The total national outlay [Rs2,709 billion] contains the development budget of Punjab and Khyber Pakhtunkhwa for only four months [due to caretaker set up in the province), but if their full budget is included in the ADP, it will exceed the figure of Rs 3 trillion,” the minister said.

Under the ADP, Ahsan Iqbal said the federal government would spend Rs1,150 billion under the Public Sector Development Programme (PSDP 2023-24) and the provinces would allocate Rs1,559 billion to execute different development projects.

He said Rs1,150 billion under the PSDP were the highest-ever allocation made in the history of the country, terming it a ‘milestone achievement’ of the incumbent government despite severe financial challenges.

‘Dismal condition of economy’

During the media talks, Iqbal also pointed out the dismal condition of the economy, saying the government would not be able to pay off debt fully through federal revenue.

“This is a defining moment of where we’ve reached,” he said. “The country will need to borrow for the rest of budget that includes salaries for the government, defense budget, development budget, pension, subsidies.”

Pakistan, which is also in political turmoil, has been caught up for months in an acute balance of payments crisis, with its central bank’s foreign exchange reserves dipping to as low as to cover hardly a month of controlled imports.

Iqbal made the announcement hours after a government source gave the figures to Reuters, including the 3.5 percent GDP target, and a 21% inflation projection for the FY 2023-24.

The estimated numbers were shared in the meeting ahead of the budget announcement, which could see changes in reviews in the lead-up to the presentation by Finance Minister Ishaq Dar in parliament, the source added.

The total outlay of the budget, or total spending, is expected to be Rs14.5 trillion ($50.70 billion), said the source. He added that the proposals also included a fiscal deficit target of 7.7% of GDP and a revenue collection target of 9.2 trillion Pakistani rupees ($32.17 billion).

The budget is being keenly watched as the government is caught between a painful fiscal adjustment reforms agenda set by the IMF, and to make room for any relief to the people ahead of a national election scheduled in early November.

For the outgoing fiscal year 2022-23, which ends on June 30, the country’s GDP growth fell to 0.29% against last year’s annual budget target of 5%, and a revised projection of 2% by the central bank.

Inflation posted at 38% in May is the highest in Asia. The IMF’s $1.1 billion funding, stalled since November, is critical for Pakistan to unlock other bilateral and multilateral financing to avert a debt default.