Privatization and Fiscal Deficit: a Case Study of Pakistan

Abstract

Privatization was started in many countries (Developed and developing) with a view that SOEs were not working efficiently and putting extra burden on government shoulders covering losses of state owned enterprises. Privatization in Pakistan was started with some specific objectives including reduction in government subsidies to public enterprises and increasing tax revenue from private enterprises. This study investigates the fiscal impact of privatization in Pakistan by comparing pre and post privatization subsidies as expenditure and taxes and sales proceeds as revenue. The findings reveal that privatization failed to meet the expectation having positive impact on fiscal deficit of Pakistan.

Keywords: SOEs (State owned Enterprises),NTN: (National Tax Number),NADRA:( (National Database and Registration Authority),PPL:Pakistan Petroleum Limited,PARCO: Pakistan Arab Refinery Limited,KAPCO: Kot Addu Power Company limited,SLIC: State Life Insurance Corporation