Islamabad: A careful review of the Prime Minister’s economic transformation agenda reveals that many government institutions, some of which are running at a loss, are still under government patronage and these institutions incurred a total annual loss of $3.7 billion in fiscal year 2021, which is one percent of the gross national product.
While in fiscal year 2022, their loss was $2.9 billion, which was 0.9 percent of the gross national product.
These institutions are not only a financial burden but are also harming the overall performance of the economy. It is said that half of the problem is solved by correctly identifying the problem, so if we examine the Prime Minister’s economic agenda, this seems to be true. However, political will is required to solve the other half of the problem.
The Prime Minister’s economic agenda has reiterated the same old thing that loss-making government institutions should be privatized on first priority, but the failure to privatize Pakistan International Airlines (PIA) has dealt a setback to the entire process.
Privatization is a complex process and it should be appreciated that the government has reiterated its commitment to continue the privatization process despite all the problems, but a comprehensive policy framework is needed for this.
One suggestion is that the privatization process should begin with the sale of such institutions that are profitable and in this regard, there are various categories of companies that can be privatized because as a result of their privatization, other different companies and institutions will show interest in the privatization process and the confidence of local and international investors will increase and this process will be faster.
There are some government institutions that have lost their practical utility in terms of business, but their importance is due to their assets. At the time of privatization of such institutions, it should be highlighted that their assets should also be sold for other commercial purposes so that the government can use the proceeds to pay off its debts.
Institutions that are completely loss-making should be sold immediately through auction or through a negotiated process.
