Shrinking middle class – A serious challenge for economic growth

QUETTA, Sep 17 (APP): Waging a struggle against unprecedented inflation and price hikes, the middle class in the country is fast shrinking posing serious challenges to economic managers and our socio-economic fabric.
The recent statistics present an astonishing situation finding this class difficult to make ends meet as this vital segment of society in any developed country, is considered a backbone of economies.
But, unfortunately in our case, this class is gradually slipping away with more and more people falling within the poverty line ambit feeling it too difficult to meet their ends.
“No one seems ready to pay heed to our miseries. No one is here to understand our sufferings. We are at a trajectory and dying as a class,” remarked Mohammad Salman. “We belong to a class that can neither seek help from the privileged ones nor be able to elucidate the poor.”
Mohammad Salman is a government servant, striving hard to manage the lives of a family of five. He lives with his parents along with four other brothers in a joint family system.
“The skyrocketing prices of daily commodities, rising utility bills, unaffordable rents of the houses and runaway inflation has put people of middle class in a dire strait,” he said.
“We are between the devil and the deep sea. Given our lifestyle and living standard, the poor take us as rich while the rich consider us worthy of no sympathy. We are a sandwich between the poorest and the richest,” he said narrating his quagmire and the middle class of Pakistan.
Waheed Khan, an employee of the Metropolitan Corporation Quetta repeats the same saga as his situation was not different from Muhammad Salman.
“With my present salary, it is impossible to manage the running expenses of my small family,” he said. “Therefore, after my job till 1500 hours at MCQ, I have to go for another private job at the wholesale market to earn some money for my family.”
The middle class had been a large populous contributing to the growth of the national economy for decades. But, the mounting prices of commodities, schooling of their offspring, electricity and gas bills, and rents have made their lives miserable with many forced to sell their valuables just to feed their children.
“The life of salaried and fixed earning class has become miserable,” said Mehfooz Ali Khan, an eminent economist and former Provincial Secretary Finance of the Balochistan Government.
Referring to the latest household survey that finds seven members as the average family size in Pakistan, he said making the monthly budget of a family of seven is hardly impossible.
“The upper class is enjoying its life as it was in the past. They have the same routines of travelling, dining, wearing, and doing business,” he said. “Where it matters, is the middle class gradually being pushed to a painful living.”
The most persuasive evidence of this squeeze is the considerable decline in the middle class’s savings rates. As per a survey report, the saving rates of the middle class were close to three percent, before rising to over 7 percent in 2007–08. After 2008, their savings rates fell sharply, back to below three percent.
Mudasir Iqbal, a school teacher said, in the recent past, he used to save a reasonable amount through ballot committees but saving money from his monthly fixed salary has now become a distant dream.
“For me, it is a challenge now to manage current household expenditures with my salary that hardly increased 20 to 30 percent during the last couple of years against the massive inflation of 200 to 300 percent,” he stated.
According to experts, if current trends continue, more than 20 million people who are currently classified as middle class will fall into the lower strata, bringing the total number of persons who are deemed lower middle class to more than 50 million.
Caretaker Information Minister of Balochistan Jan Achakzai, however, contended to turn things around and bring respite for the inflation-stricken segments of the society.
“The civil and military leadership in the country is striving hard to bring about positive change in the lifestyle of marginalized segments of the society as well as the middle class,” he pleaded.
Given the present economic turmoil, things are not that easy to address as the country is also facing a dilemma of distribution of wealth. The loopholes in the current economic system facilitate the rich to amass more wealth, at the same time letting the impoverished class to grow more destitute.
This dangerous trajectory would also have profound implications for Pakistan’s social cohesion and economic stability.
In this situation, former Finance Secretary Mehfooz Ali Khan has recommended to more revenue generation through judicious tax collection, cutting down public sector expenditures, ensure ease of doing business and reduce production cost to enhance exports.
“The time has come to charge people as per their earning. The salaried class is charged taxes at source but those earning billions slip away. We shall have to curb this tendency,” he said.
Therefore, steps are required on war footing to save our middle class by providing them relief and introducing a judicious tax system to grab money from influential who are sucking the blood of this nation since decades.

APP/ask/taj/maz (APP Feature Service)

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