The Unfair Economic Senario
Mubasher Mir
In the thick of a sweltering July, Pakistan stands at a crossroads—an old story retold with grimmer lines. The Federal and Provincial budgets for 2025-2026, framed under the vigilant gaze of the International Monetary Fund (IMF), have arrived not with relief but with renewed burdens for the common man. No stimulus for the struggling, no sanctuary for the sinking middle class—only directives, levies, and silence in the face of despair.
With each revision of fuel prices and every bill tucked under a door crack, a louder question echoes across Pakistan’s bazaars, teashops, and households: Where does this all end?
In Pakistan today, surviving itself is a luxury.
The recent hikes in petroleum prices have not just affected transport—an entire supply chain has become costlier overnight. The ripple effects are immediate and merciless: from vegetables in the market to medicine on the shelves, inflation seeps into every corner of life. Electricity tariffs, adjusted under circular debt settlements, have crossed the capacity for domestic consumers. Meanwhile, gas bills have doubled for even modest households.
According to the Pakistan Bureau of Statistics, the Consumer Price Index (CPI) inflation rate disproportionately impacting lower-income groups who spend up to 80% of their income on essentials. Contrast this with the per capita income, which, after adjustments for inflation, is estimated at around USD 1,560 annually in 2025—a figure both painful and pitiful when set against the cost of living.
Yet, those in power remain largely insulated from these harsh truths.
Now, it looks we are
Two Nations: Rich and Poor unfortunately.
Pakistan today is not a failed state, but a fractured one—split between haves and have-nots. Corporate profits soar while millions live below the poverty line. In the financial year ending June 2025, Habib Bank Limited declared profits of PKR 71 billion. MCB Bank posted PKR 45 billion. Non-banking corporates like Engro, Lucky Cement, and the automotive giants are not far behind. At the same time, over 40% of the population (more than 90 million people) lives on less than USD 3.65 a day, the World Bank’s lower-middle-income poverty line.
The commercial banking sector, backed by the State Bank of Pakistan’s interest rate , continues to profit through high spreads. Credit card interest rates are now close to 44% annually, and bank charges on basic accounts and transactions have grown steeply—making financial inclusion a bitter joke. For the salaried class and micro-entrepreneurs, banking has become a trap rather than a tool.
Pakistan’s tax regime, instead of being progressive, seems punitive. The Federal Board of Revenue (FBR) continues to miss targets despite raising taxes on electricity, mobile usage, fuel, and salaried individuals. The newly introduced 2.5% super tax on high-income earners is not trickling down as intended. Even more absurd is the taxation of already stressed small businesses through fixed and turnover taxes.
According to the IMF’s 2024 Article IV report, Pakistan’s tax-to-GDP ratio remains stuck at around 9.2%—among the lowest in the world. Yet, ordinary citizens face indirect taxes in every corner of their daily spending, effectively paying the price of elite evasion and government inefficiency.
The GDP growth rate for FY2024-25 was just 2.3%, and is projected to remain under 3% next year, per World Bank estimates. This stagnation underscores the irrationality of revenue-focused budgeting in a contracting economy.
Government expenditures show no sign of matching public austerity. Ministers travel in convoys, official lunches stretch into lakhs, and foreign delegations continue their journeys to Geneva and Dubai—all while hospitals face medicine shortages and universities lay off faculty.
Pakistan’s Human Development Index (HDI), as reported by UNDP, remains shamefully low at 0.544, ranking 161 out of 193 countries. Indicators like child mortality, female literacy, and access to clean water continue to reflect systemic neglect. This disconnect between public hardship and elite privilege breeds more than resentment—it breeds unrest.
The regulators of Pakistan’s economic destiny—SECP, State Bank of Pakistan, and the Pakistan Stock Exchange—remain aloof or compromised. Their mandate to ensure financial fairness has been overtaken by the obligation to remain in step with external financiers.
The State Bank, now operating with “autonomous” status under IMF agreements, is less a central bank and more a transmission belt for global financial dictates. It adjusts interest rates without heed to local consequences, deepening rather than healing the wounds of inflation and unemployment.
Insurance companies too, under the SECP’s lax oversight, prefer investment portfolios over assurance. Rather than extending risk coverage to agricultural or informal sectors, they chase government bonds and real estate gains. Pakistan’s insurance penetration remains at a paltry 0.9% of GDP.
What makes the economic crisis unbearable is not only its scale but its unfairness. The system is no longer indifferent—it appears extractive. When a poor family pays more in indirect taxes than a corporate group pays in income tax, when a child’s malnutrition is the price of a defence deal, when a student’s dream withers under unaffordable tuition while bureaucrats enjoy subsidized plots—this is not governance, it is betrayal and
this betrayal is feeding a new consciousness.
Independent media and civil society voices are rising despite censorship and intimidation. Journalists, economists, and digital creators are dissecting the façade of fiscal responsibility and exposing the core of cruelty in economic planning.
In the 2025 Gallup Pakistan Poll, over 67% of respondents said they believe the government does not prioritize the common man in its economic policies. Protests over electricity bills in Sindh, wheat procurement issues in Punjab, and teacher layoffs in KPk are more frequent and intense.This has been learnt that
the people are not just angry—they are awakening.
There is no magic solution, but there is a starting point: fair regulation and fearless accountability.
We need a financial sector that supports real economic activity—not one that profits from scarcity. We need a tax system that asks more of the privileged and less of the precarious. We need public spending that reflects empathy, not entitlement. We need insurance that insures, regulators that regulate, and banks that serve—not enslave.
Above all, we need people’s representatives to remember why they are called representatives. Parliamentary presence must become purposeful. Legislative debates must turn from theater to truth-seeking. The idea of Pakistan, as envisioned by Iqbal and Jinnah, was not one where the state extracts life from its citizens in the name of stability
Unfair economic systems have short lives. They carry the seeds of collapse in their very operation. Whether through democratic renewal, policy reform, or the eruption of mass dissent—change becomes inevitable when justice is denied for too long.
Let us be clear: Pakistan’s potential is not dead. Its people remain resilient. Its youth are brilliant. But their patience has a limit.
The time for excuses has passed. The future must belong to fairness—or not at all.