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No more dreams as rich-poor divide widening at frightening pace

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No more dreams as rich-poor divide widening at frightening pace

The newspapers and TV screens are bombed with new housing schemes, new eateries serving the elite and upper middle class are being opened, car parking is a problem outside high-end outlets and departmental stores during rush hours, brand new SUVs and convertibles are seen on roads.

On the other hand, there are others who have reduced food intake due to a record-high inflation, once bustling markets with the middle class families are empty, there are long queues of men and women where cooked meal or grocery items are the distribution points.

Both scenario involve real humans living in the same country and city amid the same economic crisis that has triggered inflation and cost of living crisis. Same

Surely, there is something that differentiates the two sets of people. What is this? Ample finances for the first and reduced purchasing power for the second?

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Yes, but there is something more as the cost of living or purchasing power crisis should affect everyone. There is inflation and the prices of all commodities – from food to luxury items – have surged.

If the income of the first set of people has also reduced and they are only spending their savings, then it is incomprehensible because they aren’t stupid. No one would waste money on expensive coffee or imported car or buy a piece of land without a sustained money supply.

So the only thing separating the two is that the elite and the upper middle class still enjoy reliable sources of money even during an economic crisis that has destroyed many lives.

And it is also means that the gap between the rich and the poor is widening – the most frightening consequence of the current turmoil.

Of course, the wealthy classes around the world are acting in the same. China is an example. But it raises another question: for how long they can sustain this crisis or are they immune to it?

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As far as Pakistan is concerned, we need more in depth look into the phenomenon as we don’t have the required industrial base and economic resources.

“Tax amnesty schemes and exemptions are for the rich. The salaried class members start thinking about the next pay cheque even before 15th of the month,” says a citizen, explaining the state of affairs in a clear manner.

It is the government policies like tax breaks and financial incentives that help the wealthy grow their money through financial market investments.

Meanwhile, those not falling in this category are burdened with indirect taxes and higher electricity, gas, petrol and diesel prices with any wage or income growth.

The higher cost of doing business means businesses and industrial units – from small and medium to large – busted. They are either shut down permanently or bought by the others, further leading to concentration of wealth.

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But this cycle doesn’t stop there as the fewer number of businesses in any sector means less competition, exploiting new avenues for exploitation. What we have been witnessing in shape of Big Tech and the banking sector in the developed economies is enough to understand the dynamics.

However, don’t forget looking around you in the market you visit for groceries and other any other item. Even eateries of different nature would help you realise that the concertation of wealth is happening around you right now slowly but surely.

“Till 1980s, even the low-income families would dream about buying a small piece of land to build a new house. But things had already started changing slowly. By the time we reached late 1990s, having land of their own had become impossible for many.”

This man, who was in his 70s, described the state of affairs correctly, adding, “It all came to an end due to the much-glorified Musharraf boom. He snatched even our dreams although a large chunk of the educated urban middle and upper middle thinks otherwise because of being a beneficiary of the bubble.”

He listed two factors for 1980s being a turning point? The effects of Dubai Chalo saga – the remittances sent from the Gulf States – and the jihad money of Zia era became visible to everyone with the skyrocketing land prices.

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Just forget the big cities. Take Abbottabad for an example. A canal of land was available for less than Rs7,000 near the Ayub Medical College in late 1970s. However, the same plot was priced at Rs1.5 million just over 10 years later. Now calculate the difference with the current rate.

In our long journey, we in Pakistan have always left out the weaker during the recent decades. But the unprecedented rate and intensity of the ongoing changes around us certainly make these terrifying.

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Budget 2024-25: Sindh announces up to 30pc increase in salaries

Budget 2024-25: Sindh announces up to 30pc increase in salaries

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Budget 2024-25: Sindh announces up to 30pc increase in salaries

The Sindh government has proposed up to 30 percent increase in salaries of its employees in the budget for next fiscal year 2024-25. 

Chief Minister Murad Ali Shah, who also holds the portfolio of finance minister, presented the budget in the provincial assembly on Friday. 

He said the government had proposed 30pc increase in salaries of officials from Grade 1 to 6, adding that there was 25pc increase for officials of Grade 7 to 16. Similarly, officers from Grade 17 to 22 would get 22pc hike in their salaries. 

Furthermore, the provincial government has propsed 15pc increase in pension of the retired employees. 

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Presenting the budget with a total outlay of Rs3,352 billion, he said, the government had decided to allocate Rs959 billion for development projects.

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Rs37,000 minimum wage: Sindh follows in the footstep of federal govt, Punjab

Rs37,000 minimum wage: Sindh follows in the footstep of federal govt, Punjab

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Rs37,000 minimum wage: Sindh follows in the footstep of federal govt, Punjab

The Sindh government has revised the minimum wage for unskilled labourers to Rs37,000 in line with decisions of the federal and Punjab governments. 

The minimum salary has been increased by Rs5,000 as previously it stood at Rs32,000. The proposal was laid forth by Chief Minister Murad Ali Shah while presenting the budget for the fiscal year 2024-25. 

Meanwhile, the Sindh government has proposed up to 30 percent increase in salaries of its employees in the budget for next fiscal year 2024-25. 

The chief minister said the government had proposed 30pc increase in salaries of officials from Grade 1 to 6, adding that there was 25pc increase for officials of Grade 7 to 16. Similarly, officers from Grade 17 to 22 would get 22pc hike in their salaries. 

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Furthermore, the provincial government has propsed 15pc increase in pension of the retired employees.

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Budget 2024-25: Let’s figure out the cost of essentials

Budget 2024-25: Let’s figure out the cost of essentials

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Budget 2024-25: Let's figure out the cost of essentials

The federal government has announced a staggering Public Sector Development Programme (PSDP) worth Rs1,500 billion. 

According to the budget document, all federal divisions have been allocated budget, except the Poverty Alleviation and Special Safety Division, which deals directly with matters concerning 95 million people who are living in abject poverty. 

Sadly, the Poverty Alleviation and Special Safety Division gets nothing in the PSDP 2024-25. 

Worse still, the Ministry of Poverty Alleviation and Social Safety does not have any minister as its head, rendering it almost moribund for more than 10 months. Earlier, Dr Sania Nishtar was chairing it during the PTI government, followed by Shazia Marri during the PDM government. 

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Last year, 12.5 million people slipped into poverty, which took it from 34.2pc to 39.4pc, according to the World Bank. 

The government has conveniently ignored the poor in the budget. Other than announcing Rs598.71billion under the Benazir Income Support Programme (BISP), no substantial amount has been earmarked for reducing poverty. 

Your next read: BUDGET 2024-25 – A LAYMAN’S GUIDE 

Analysts believe that 27 percent increase in BISP from Rs471.3 billion to Rs598.71 billion has been made to placate the Pakistan Peoples Party, which may take the wind out of PML-N’s sails anytime. 

BURGEONING TAXES 

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On the other hand, if we delve into the details of burgeoning taxes, Sales Tax stands out in afflicting the poor the most. 

Now a sales tax of 10pc will be charged on stationery items. 

Tribal area residents who have been experiencing extreme poverty will now have to pay 6pc tax on the supply and import of plant machinery as well as electricity on both residential and commercial connections. 

Following the similar trajectory, a 10pc sales tax will be charged on the local supply of vermicelli, buns, poultry feed, cattle feed, sunflower seed meal, newsprint, books, oil cakes and tractors. 

On mobile phones whose value is less than $500 (Rs139,240), 18pc tax has been imposed. If the value of purchased phone exceeds $500, an existing rate of 25pc will remain unchanged. 

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Earlier, the retailers of leather and textile products who paid 15pc sales tax will now have to pay 18pc tax. 

Drug prices will increase massively as the sales tax on raw materials used in production of pharmaceutical items has been raised to 18pc from 1pc. This will be applicable on medical treatment, diagnostic equipment, heart surgery, neurosurgery, electrophysiology, endoscopy, endosurgery, oncology, urology, gynaecology, disposables and other medical equipment.

Besides, 20pc sales tax on import of syringes, needles, catheters, cannulae, blood collection tube of glass and blood collection tube of PET.

Moreover, charitable hospitals with 50 or more beds will pay 18pc sales tax on imported medical goods. 

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