india brink new

Is India on the brink of a new political transform…

The world’s largest democracy appears to be at a defining moment in its history, where fundamental questions are once again being raised about the future of the state, politics, constitutionalism, the judiciary, the media, and the country’s broader social order.

Consecutive electoral victories by Prime Minister Narendra Modi and the Bharatiya Janata Party (BJP) have elevated the ideology commonly known as Hindutva, often associated with Hindu majoritarian politics, to the centre of India’s political discourse.

Its proponents describe it as an effort to reclaim India’s ancient civilizational identity and cultural heritage. Critics, however, argue that the notion of a single, unified ancient Indian civilization oversimplifies the subcontinent’s historical evolution. For centuries, the Indian subcontinent has been shaped by a mosaic of religions, kingdoms, languages, ethnic communities, commercial networks, and cultural exchanges. Rather than reflecting a single, monolithic civilization, its history reveals a continuously evolving and pluralistic civilizational stream. In today’s interconnected digital age, many historians and political commentators argue that reconstructing such a singular historical identity is neither historically accurate nor socially attainable. They contend that the project has placed India’s constitutional secularism, communal harmony, and federal balance under unprecedented strain.

Since assuming office in 2014, the Modi government has introduced a series of policies that have generated intense political debate both within India and internationally. The abrogation of Article 370, which revoked the special constitutional status of Jammu and Kashmir, the Citizenship Amendment Act (CAA), discussions surrounding a Uniform Civil Code, legislation targeting religious conversions, incidents of mob violence associated with cow protection, and the use of “bulldozer politics” in several states have all contributed to deep political polarization.

According to many political observers, Hindutva has evolved beyond an ideological movement into a powerful influence over electoral politics, state institutions, public discourse, and sections of the media. Critics argue that Muslims, Sikhs, Christians, Dalits, and, at times, even Hindus expressing dissent have experienced growing political and social pressures. The government and its supporters reject these allegations, maintaining that the rule of law applies equally to all citizens and that such criticisms are politically motivated.

Debate has also intensified over the independence of India’s judiciary, Police, investigative agencies, and media institutions. Former judges, retired civil servants, journalists, and civil society representatives have, on various occasions, expressed concerns regarding institutional autonomy. The government, however, insists that India’s constitutional institutions continue to function independently and effectively.

The role of the media has emerged as another defining feature of this political transformation. Critics contend that sections of mainstream television increasingly amplify the government’s narrative while providing limited space for dissenting voices. Independent journalists and digital media platforms have similarly argued that the space for critical journalism has narrowed. Government representatives, on the other hand, maintain that India’s media landscape remains diverse, vibrant, and free.

Electoral politics constitutes another important dimension of this debate. The BJP’s sustained electoral success is widely attributed to its highly organized party structure, the extensive grassroots network of the Rashtriya Swayamsevak Sangh (RSS), sophisticated campaign strategies, an effective digital presence, and Prime Minister Modi’s personal popularity. Opposition parties, particularly the Indian National Congress, have repeatedly raised concerns regarding campaign financing, the alleged misuse of state institutions, voter registration practices in certain regions, and unequal political conditions. These competing narratives remain the subject of intense political contestation.

Congress leader Rahul Gandhi has sought to counter the BJP’s political narrative through initiatives such as the Bharat Jodo Yatra and the Bharat Jodo Nyay Yatra. His central argument has been that India’s enduring strength lies in its constitutional democracy, religious pluralism, cultural diversity, and linguistic richness rather than in majoritarian politics. According to Gandhi, safeguarding constitutional institutions and preserving social cohesion are essential to India’s democratic future.

Recent demonstrations, political mobilizations, and episodes of public unrest across different parts of the country have revived questions about whether India is entering a new phase of political transformation. Should these expressions of public discontent evolve into a broader nationwide movement, some analysts believe they could represent the most significant democratic mobilization since the Emergency imposed in 1975. Whether such a transformation materializes will ultimately depend on public participation, opposition unity, the state’s response, and the resilience of India’s constitutional institutions.

Historically, India’s greatest strength has been its extraordinary civilizational diversity, religious pluralism, federal structure, and democratic traditions. If growing political divisions are not addressed through constitutional mechanisms, democratic dialogue, and the rule of law, their consequences may extend beyond India’s borders, affecting regional stability, economic cooperation, and prospects for peace across South Asia.

The defining question, therefore, is not simply which political party will win the next election. Rather, it is whether India can preserve the foundational principles of its Constitution, democracy, federalism, religious freedom, the rule of law, and equal citizenship, for future generations. The answer to that question is likely to shape not only India’s political trajectory but also its role on the global stage in the decades ahead.

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  • Why System Collapsed in Pakistan?

    These days, one phrase echoes throughout our country: “Pakistan’s system has collapsed.” If we translate the word collapse into plain, colloquial language, it means that our so-called system has completely broken down, gone to ruin, or become utterly dysfunctional. Therefore, the argument goes, the country now needs a new system. This, they claim, can only happen if, instead of the existing four provinces, Pakistan is reorganized into thirty or thirty-two new provinces. Such a restructuring, they believe, would push aside the traditional politicians and allow a new generation of political leaders to emerge. Otherwise, they warn, just as in India, there will be an uprising of the “cockroaches”—that is, the youth—which will force this collapsed, rotten system to surrender. At first glance, these words appear attractive and appealing. They express not only frustration and disgust with our current political situation but also offer hope to the younger generation, particularly Generation Z. It is as if they are saying: “Dear frustrated young people! We are opening the doors to your future. You will rise, dominate the scene, and sweep away all the debris of the past—that is, the traditional politicians—with the force of your determination and enthusiasm.” However, this humble writer sees, behind these beautiful words, not a bright future but the same worn-out and ugly mirage of the past. In reality, those who are truly responsible—the real culprits—cleverly distance themselves from blame, divert the attention of the youth toward others, and then present themselves as the young people’s sympathizers and supporters. In our poetry, it is through such tricks that the beloved murderer becomes an innocent beloved, and the criminal appears as the trusted confidant. But this humble writer calls it what it really is: “the thief making the loudest outcry.” Our national poet, Iqbal, once wrote: There is an outcry that Muslims have vanished from the world; We ask: Were true Muslims ever really present? In appearance you resemble Christians, in civilization the Hindus; These are the Muslims before whom even the Jews would feel ashamed. If, in today’s circumstances, you replace the word “Muslims” with “system,” the verses take on a striking new meaning: There is an outcry that the system has vanished from the country; We ask: Was there ever really a system to begin with? If we were to parody the remaining verses, they might be difficult for some to digest. Suffice it to say that those in power never truly allowed a genuine system to develop here. And whenever, after much struggle, some semblance of a system did emerge, there were always certain “respectable gentlemen” who seemed to have taken an invisible oath—or perhaps a vow of deliberate silence—that it must never be allowed to function. In the eyes of this humble writer, our system truly collapsed on 16 August 1946, when, under the guidance of the British establishment, the Direct Action Day was observed, reducing the foundations of any future system to rubble. From that point onward, the struggle was no longer for a functioning system but for personal rule. That struggle strangled democracy, human rights, liberty, and freedom, and instead built a grand highway of coercion and dictatorship. Anyone who dared to step off that path or disagree with it was labeled a traitor, an enemy of the nation, an Indian agent, or part of the so-called “Fitna-e-Hind” (the Indian conspiracy). These labels were then applied to whomever those in power wished. The first victim was Dr. Khan Sahib’s democratically elected provincial government in the North-West Frontier Province (now Khyber Pakhtunkhwa), which was dismissed within the very first week. Soon afterward, the same authoritarian mentality struck the government of Ayub Khuhro in Sindh. It was also decided that any cabinet member who failed to say “Yes, Sir” to the Governor-General would be considered dispensable. Once the founding generation established such principles of governance, why would later generations lag behind in following them? Thereafter, the race for personal power was inevitable. In the end, victory was bound to go to whoever possessed the greater force—whether the power of the stick or the gun. How could it be otherwise? If, instead of making the Constitution and the rule of law your source of authority, you rely on personal superiority, intimidation, prestige, and the power of office, then someone carrying a gun will inevitably dominate the throne of personal power. And once that happens, the cycle simply continues. It is a law of nature that the bigger fish eats the smaller fish. Muhammad Ali Jinnah, Liaquat Ali Khan, Ghulam Muhammad, and Iskander Mirza all played their respective roles. Later, when greater power confronted lesser power, the result was the rise of powerful military rulers such as Ayub Khan, Agha Yahya Khan, Zia-ul-Haq, Pervez Musharraf, Ashfaq Parvez Kayani, and Qamar Javed Bajwa. (To be continued)

  • Circular debt: claims collapse, liabilities return

    The government’s claims of containing power-sector circular debt have not survived the test of its own year-end figures. During the fiscal year (FY) 2025–26, another Rs. 364 billion was added to the flow of circular debt. This happened despite the provision of Rs. 302 billion in subsidies and repeated assurances that operational improvements, tariff adjustments, negotiations with independent power producers and financial restructuring had brought the problem under control. According to the latest report, the gross addition of Rs. 364 billion was Rs. 319 billion, or 709 percent, higher than in the preceding year. After using Rs. 302 billion of public money to reduce the accumulated liability, the reported stock still increased by about Rs. 61 billion from its June 2025 level of Rs.1.614 trillion. These numbers expose the difference between managing the recorded stock and stopping the recurring flow. A subsidy can reduce the amount appearing in the circular-debt account on a particular date. It cannot remove the inefficiencies, payment defaults, regulatory delays and governance failures that create new liabilities every month. The Power Division had taken a very different position earlier. Responding to reports that circular debt had risen during July–November 2025, it described the increase as seasonal and maintained that such variations normally reversed during the second half of the financial year. Its official rebuttal predicted that the circular-debt position would be fully contained by June 2026, with no net addition to the overall stock. The financial year has ended with a gross flow of Rs. 364 billion and a net increase even after a large fiscal injection. The promised reversal did not take place. The language of containment concealed continued deterioration in the financial operations of the power sector. The reported composition of the increase is equally disturbing. Inefficiencies of power distribution companies caused losses of Rs. 262 billion, only Rs. 3 billion less than in the preceding year. Lower recovery of electricity bills added Rs. 64 billion. Interest charges contributed another Rs. 14 billion, while delays in tariff adjustments added Rs. 75 billion. A further Rs. 194 billion arose from non-payment by K-Electric, reportedly connected with the delay in determining its multi-year tariff. This cannot be classified as an unavoidable commercial loss. It represents a failure of regulation, contract administration and timely governmental decision-making. When tariff determinations, subsidy decisions or payment settlements are delayed, the resulting liability does not disappear. It moves through the electricity chain until it is recorded as circular debt and passed to taxpayers or consumers. The reported components and adjustments must be examined carefully when the complete official statement is released. The latest report available on ministry’s website is of April 2026. The Power Division has not placed even its one-page circular-debt reports from May to July 2026 on its website. Public discussion is consequently being conducted based on figures reported in the press. The government cannot demand acceptance of its success narrative while withholding the underlying data required testing it. The Rs. 302 billion subsidy used to contain the closing stock was nearly half of the approximately Rs. 630 billion collected in income tax from salaried persons during the same year. This comparison shows the real social cost of power-sector failure. Citizens who have no role in managing distribution companies, finalising tariffs or settling inter-company disputes are required to finance the consequences through taxation. They also pay through electricity tariffs, surcharges, fuel-price adjustments and declining service quality. Honest consumers are charged for theft, poor recoveries, technical losses and delayed official decisions. As tariffs rise, more households and businesses with adequate resources shift to rooftop solar systems. The grid is left with a shrinking base of paying consumers and a large stock of fixed capacity costs. Tariffs must then be raised further to recover those costs from fewer units sold. The policy response itself deepens the financial problem. For more than a decade, governments and the International Monetary Fund (IMF) have relied heavily on tariff increases, periodic adjustments, withdrawal of subsidies and additional surcharges. These measures may narrow the accounting gap temporarily, but they do not establish commercial discipline within distribution companies or personal accountability for persistent losses. The IMF reportedly allowed up to Rs. 400 billion to be added to the circular-debt flow during FY 2025–26, while requiring the government to neutralise the addition through budgetary subsidies. This approach turns circular debt into an exercise in fiscal presentation. A liability generated inside the electricity system is paid from the federal budget and then described as contained. The loss has not been eliminated. Its location has changed. The same problem arises with the Rs. 1.225 trillion circular-debt settlement plan. Refinancing expensive liabilities at more favourable rates can reduce financing costs and provide immediate liquidity. It does not constitute retirement of debt in any economic sense when the replacement financing has to be repaid over six years through charges imposed on electricity consumers. Pakistan will be servicing yesterday’s circular debt while the unreformed system continues creating fresh liabilities. Financial engineering is being presented as reform because it postpones recognition of the full fiscal burden. Liquidity becomes a substitute for correcting the institutions responsible for the crisis. The proposed privatisation of the distribution companies also requires closer scrutiny. The government has started with Faisalabad, Gujranwala and Islamabad electricity supply companies, which are among the relatively better-performing entities. Selling profitable or manageable companies while retaining those responsible for the largest losses will not remove the structural deficit. It may deprive the public sector of its stronger revenue-generating assets while leaving taxpayers responsible for the weakest companies. Privatisation can improve performance where there is transparent valuation, effective regulation and genuine transfer of commercial risk. It cannot succeed if private investors acquire the sound operations while the state remains responsible for accumulated liabilities, political interference, theft-prone areas and unrecoverable receivables. That would amount to privatisation of gains and socialisation of losses. A credible reform programme must begin with full disclosure. Monthly circular-debt reports should identify, company by company, transmission and distribution losses, recovery ratios, unpaid

  • Xi Jinping’s vision for stronger party governanc…

    Since the 18th National Congress of the Communist Party of China (CPC), the CPC Central Committee with General Secretary Xi Jinping at its core has put forward a series of new ideas, new thinking and new strategies centered on the major issue of the era—what kind of long-term governing Marxist party to build and how to build it—giving rise to Xi Jinping Thought on Party Building. As an important component of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, Xi Jinping Thought on Party Building carries significant practical relevance and far-reaching guiding significance for strengthening the Party and the nation. It explicitly sets forth the “14 commitments”, namely: adhering leadership by the CPC as the defining feature of socialism with Chinese characteristics; upholding the centralized, unified leadership of the Party Central Committee; exercising full and rigorous Party self-governance; staying true to the Party’s original aspiration and founding mission; taking strengthening the Party politically as the overarching principle; building cohesion and inner strength with the Party’s latest theory; forging strong Party spirit; improving the organizational system to ensure vertical coherence and effective implementation; cultivating high-caliber officials capable of shouldering the mission of national rejuvenation; making sustained and effective efforts to improve conduct; governing the whole Party with strict discipline; taking integrated steps to ensure that officials do not have the audacity, opportunity or desire to conduct corruption; governing the Party through systems and regulations, and ensuring that the political responsibility for Party self-governance is fulfilled. The “14 commitments” represent a concentrated summary of General Secretary Xi Jinping’s landmark, guiding new ideas and strategies on party building in the new era. They serve as the fundamental guideline for the CPC in strengthening party building, as well as a Chinese approach for political parties around the world to enhance self-improvement and state governance. China and Pakistan are ironclad friends and all-weather strategic cooperative partners. We are ready to deepen exchanges and mutual learning with Pakistan on party building and governance, work together to improve people’s well-being and promote prosperity and development, and accelerate the building of an even closer China-Pakistan community with a shared future in the new era. We must put people first and ensure that China-Pakistan cooperation delivers greater benefits to the two peoples. The CPC has always upheld building the Party for the public good and exercising state power for the people. Xi Jinping Thought on Party Building explicitly stresses “remaining true to the original aspiration and founding mission”, namely to seek happiness for the Chinese people and rejuvenation for the Chinese nation. Back in 2012, General Secretary Xi Jinping pointed out that our Party is dedicated to serving the people wholeheartedly; the people’s desire for a better life is the goal we strive to work for. Guided by this profound devotion to the people, in the well-known poverty elimination campaign in China, General Secretary Xi Jinping set a shining example through personal commitment. He conducted more than 50 field research visits on poverty alleviation, covering all 14 contiguous poor regions across China. Based on thorough investigations, he put forward and applied the concept of targeted poverty alleviation, setting a brilliant example of integrating the power of truth with moral integrity. Under his leadership, China won the poverty alleviation campaign, built a moderately prosperous society in all respects, and embarked on a new journey of advancing national rejuvenation and building a great modern socialist country through Chinese modernization. Practice since the 18th National Congress of the Communist Party of China (CPC) has fully demonstrated that the historic achievements and transformative changes in the cause of the Party and the country are fundamentally attributable to the steady guidance of General Secretary Xi Jinping as the core of the CPC Central Committee and of the Party as a whole, and to the scientific guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. Under the strong leadership of General Secretary Xi Jinping and the Party Central Committee, over 3 million first secretaries of CPC village committees and village-based officials, together with nearly 2 million township officials and millions of village officials, fought in unison to eliminate absolute poverty. This fully demonstrates the CPC’s capacity to mobilize resources to accomplish major undertakings, and embodies two core principles highlighted in Xi Jinping Thought on Party Building, which is “adhering to the leadership by the CPC as the defining feature of socialism with Chinese characteristics” and “upholding the centralized, unified leadership of the Party Central Committee. It is precisely because the CPC always puts people first and regards delivering people’s wellbeing as its paramount achievement that it enjoys enduring popular support and stands as the most reliable backbone for the Chinese people. Beyond seeking happiness for the Chinese people and rejuvenation for the Chinese nation, the CPC also strives for progress for humanity and the common good for the world. As General Secretary Xi Jinping noted, we Chinese not only aspire for good living for ourselves, but also hope people in other parts of the world lead a decent life. This is fully reflected in the development of China Pakistan relations in the new era. General Secretary Xi Jinping has always been concerned about and supported Pakistan’s national development and the improvement of people’s livelihoods. He and Pakistani leaders established the all-weather strategic cooperative partnership between the two countries and reached important consensus on building an even closer China-Pakistan community with a shared future in the new era. General Secretary Xi Jinping has stressed that China’s friendly policy toward Pakistan is always oriented toward all Pakistani people, the planning and layout of the China-Pakistan Economic Corridor (CPEC) should take into account all regions of Pakistan, so that the fruits of development can benefit all the Pakistani people. To date, CPEC has brought in over 25.9 billion US dollars in direct investment, created more than 260,000 jobs, added over 8,000 MW of power generation capacity, built 510 kilometers of highways and 886 kilometers of core national power

  • Imran khan’s health and the state’s respon…

    It’s not about the prisoner’s health only its about Pakistan. When a state holds a political leader in prison, it assumes a responsibility that goes beyond the enforcement of a court sentence. It assumes responsibility for the person’s safety, dignity and health. That principle should be beyond politics. In Pakistan, however, even a prisoner’s eyesight has become part of the country’s bitter political struggle. The continuing controversy over Imran Khan’s health is therefore about much more than one man. It raises a fundamental question about the relationship between the citizen and the state: what happens to individual rights when political conflict becomes so intense that every state decision is viewed through the prism of partisan politics? Imran Khan, Pakistan’s former prime minister and one of its most influential political figures, has been in prison since 2023 in connection with multiple legal cases. His supporters have repeatedly raised concerns about his health and access to appropriate medical care. More recently, particular concern has focused on his eyesight. Reports in early 2026 said that Khan had developed a retinal condition affecting his right eye. His family and political representatives questioned whether he had received adequate specialist treatment, while the authorities maintained that he was being properly cared for. A government-appointed medical board subsequently reported improvement in his eyesight. The conflicting accounts should not be allowed to become another chapter in Pakistan’s political war. There is a remarkably simple way to address the problem: independent medical assessment and complete procedural transparency. If Khan is medically stable, independent specialists should be able to establish that fact. If he needs treatment, it should be provided without delay. If his family disputes the government’s medical assessment, credible specialists should be permitted to review it. There should be no political advantage in either concealing a medical problem or exaggerating one. This should be obvious in any functioning democracy. Yet Pakistan’s political history makes it anything but simple. For decades, political power in Pakistan has been accompanied by institutional confrontation. Governments have used legal and administrative mechanisms against their opponents, only to find themselves out of power and vulnerable to similar treatment later. Political parties that once demanded accountability have subsequently complained of victimisation when they became targets themselves. The result is a vicious cycle in which accountability is increasingly viewed through the language of revenge. Imran Khan’s imprisonment has become one of the most visible manifestations of that crisis. His supporters see him as the victim of an establishment-backed campaign to remove him from politics. His opponents argue that the cases against him are matters of law and accountability and that political popularity cannot place anyone above the law. Both arguments can be debated. Courts can determine questions of guilt and innocence. Voters can judge political performance. Parliament can debate constitutional questions. But none of these arguments should determine the standard of medical care available to a prisoner. That distinction is essential. The state has the authority, within the law, to imprison a person. It does not acquire unlimited authority over that person’s body or dignity. Detention restricts liberty, it does not erase humanity. This principle becomes even more important when the prisoner is a former head of government. The treatment of such a person inevitably becomes a test of institutional maturity. The government may have legitimate reasons for keeping Khan imprisoned, but it should have an equally compelling interest in ensuring that his medical treatment cannot reasonably be portrayed as political punishment. The irony is that transparency would serve everyone. It would protect Khan from inadequate treatment. It would protect his family from uncertainty. It would reassure his supporters. And it would protect the government from accusations that medical care is being manipulated for political purposes. Instead, Pakistan often chooses the opposite path. Official statements are followed by political counterstatements. Medical reports become partisan documents. Families make allegations. Governments issue denials. Social media turns uncertainty into outrage. And a question that should have been answered by doctors becomes another battlefield between political camps. This is not merely a communications failure. It is an institutional failure. A credible democratic state must have mechanisms capable of resolving such disputes without requiring citizens to choose which political side they trust. Pakistan could establish precisely such a mechanism. High-profile prisoners could be examined by independent medical boards selected through transparent professional criteria. Prisoners could have access, where appropriate, to independent specialists. Medical records could be maintained according to professional standards, while necessary information could be shared with families and the courts. Where a serious disagreement arises, an independent medical opinion should be available. Such safeguards should not be created specifically for Imran Khan. They should apply to everyone. The ordinary prisoner matters too. Pakistan’s prisons contain thousands of people whose health concerns rarely receive national attention. They may not have political parties, lawyers appearing on television every evening, influential families or millions of supporters on social media. Yet their right to humane treatment is no less important. Indeed, the treatment of ordinary prisoners may be the more meaningful measure of the state’s commitment to human rights. But Khan’s case provides Pakistan with an unusual opportunity. Because his imprisonment is already under intense national and international scrutiny, the government can demonstrate that the state is capable of separating political disagreement from humanitarian responsibility. That would require political courage. A government does not become weaker by allowing an opponent proper medical treatment. It becomes weaker when it appears afraid of transparency. A government does not demonstrate authority by controlling every narrative. It demonstrates authority by allowing facts to withstand scrutiny. This is particularly significant for Pakistan’s international reputation. Pakistan frequently presents itself as a democratic state committed to constitutionalism, human rights and the rule of law. Yet international credibility is not built through diplomatic declarations alone. It is built through conduct, especially when circumstances are politically uncomfortable. The treatment of political opponents is one of the clearest indicators of democratic health. A democracy cannot be judged only by how it treats

  • Beyond Public Finance: Towards  Constitutional Po…

    The fourth part of this series argued that reforms fail when their design ignores the constitutional rules, institutional incentives and political interests that determine implementation. Pakistan’s problem, however, goes deeper than the capture of individual tax measures. The state itself has gradually become accustomed to obtaining resources through rents rather than creating the conditions for sustained production. A rent is an economic benefit obtained through control over a privilege, resource, regulation or strategic position rather than through corresponding productive activity. Rent-seeking begins when individuals, institutions and organised groups devote their energies to obtaining such benefits from the state instead of producing goods, improving services, developing technology or competing in open markets. Pakistan’s political economy has long rewarded access more generously than enterprise. Access to state land, subsidised credit, protected markets, statutory exemptions, import licences, public contracts, regulatory concessions, tax amnesties, administered prices and preferential treatment has frequently generated returns exceeding those available from productive investment. The result is an economy in which political connections can matter more than innovation, and proximity to authority can be more valuable than efficiency. This system is sustained at two interconnected levels. Domestically, privileged groups compete for benefits distributed through state power. Externally, the state repeatedly seeks resources by converting Pakistan’s strategic location and security relevance into financial assistance, debt rollovers, deposits, concessional oil arrangements and diplomatic support. The interaction between these two levels is central to understanding Pakistan’s continued dependence. External financing is not inherently harmful. Developing countries require foreign capital, technology and access to markets. Borrowing can finance infrastructure and productive capacity that generate future income sufficient to service the debt. Strategic partnerships can provide security and economic opportunities. The problem arises when external inflows substitute for domestic transformation. Pakistan has repeatedly treated foreign exchange availability as proof of economic recovery. Reserves rise after an IMF disbursement, bilateral deposit, commercial loan or rollover. The immediate threat of default recedes. The exchange rate stabilises and the government declares that confidence has returned. The underlying productive structure, however, may remain unchanged. The IMF completed the third review of Pakistan’s Extended Fund Facility in May 2026, permitting immediate disbursements of approximately US$1.1 billion under the EFF and US$220 million under the Resilience and Sustainability Facility.  Total disbursements under the two arrangements consequently reached about US$4.8 billion. The Fund also reported progress in rebuilding reserves and achieving the agreed primary surplus. These developments provide necessary breathing space. They do not constitute economic independence. Recent events offer an unusually clear illustration. Pakistan reportedly requested a US$10 billion exchange-stabilisation facility from the United States after playing a diplomatic role in the Middle Eastern conflict. Economists quoted by Reuters questioned whether fresh financing would address the reforms Islamabad had repeatedly avoided. One analyst described the proposed support as “geopolitical rent”. Pakistan had earlier repaid US$3.5 billion to the United Arab Emirates and obtained a US$3 billion Saudi backstop to help fill the resulting gap.  The episode is not remarkable because Pakistan sought assistance during a difficult external shock. Responsible governments must protect reserves and manage emergencies. Its significance lies in the familiar institutional response: once again, strategic usefulness is expected to generate the liquidity required to postpone a deeper restructuring of the economy. However, fresh liquidity can purchase time. It cannot manufacture productivity. Pakistan’s external relationships have repeatedly followed this pattern. During the Cold War, the country received assistance because of its strategic position. The Afghan war transformed Pakistan into a frontline state and brought large flows of military and economic support. The post-2001 “war on terror” renewed the same bargain under different circumstances. Regional conflicts, security alliances and diplomatic mediation continue to create opportunities for financial support. Each inflow temporarily relaxes the pressure for reform. It also strengthens those institutions capable of negotiating and managing the strategic bargain. The constitutional consequence is profound. A state financed substantially through its citizens must negotiate with them. It requires a productive economy capable of generating taxable income and a political order capable of securing broad consent. A state able to obtain resources externally can delay that negotiation. This is one reason why taxation and representation cannot be separated. Dependence upon external rents weakens the fiscal relationship between citizen and state. Governments remain less accountable to taxpayers when foreign creditors, strategic partners and captive domestic sectors provide the resources necessary for survival.  The burden of adjustment is then transferred to those lacking political protection. Salaried persons face deduction before receiving their income. Documented businesses encounter withholding taxes, minimum taxes, advance taxes and delayed refunds.  Consumers pay indirect taxes and levies through electricity, fuel, telecommunications and ordinary purchases.  Powerful sectors negotiate exemptions, reduced rates, amnesties or deferred enforcement. External rents and domestic privileges are therefore not separate distortions. They reinforce each other. The article, “The age of implosion: exhaustion and the hollow core”, recently published in Business Recorder, offers a useful metaphor for this condition. It argues that financial movement can create the appearance of vitality while the productive foundations of the economy continue to weaken. Loans, deposits and other inflows may keep institutions operating outwardly even when their inner capacity is being exhausted.  The metaphor requires institutional precision. Pakistan has not ceased functioning. Taxes are collected, budgets are passed, debt is serviced, imports continue and administrative structures remain active. The state survives through a combination of borrowing, external support, remittances, taxation of captive sectors and periodic transfer of costs to future generations. This should not be mistaken for resilience. It is deferred adjustment.  The official Pakistan Economic Survey 2025–26 continues to organise the country’s performance through conventional categories of growth, investment, trade, fiscal development, public debt and social indicators. These measurements are necessary, but they do not fully capture the political mechanisms determining why available resources flow towards consumption, protection and rent extraction rather than productivity, human development and technological advancement.  A rent-based economy also shapes the behaviour of the private sector. Businesses rationally adapt to the incentives created by the state. Where profits depend upon tariff protection, regulatory discretion, government contracts,

  • Mistaken Credit to a Bank Account: Legal Position

    Pakistan’s banking sector is experiencing a fast pace digital transformation, which includes inception of new digital banks as well as digitalization of the banking services, like Raast, Roshan Digital Accounts etc. Nevertheless, this digitalization sometimes causes technology mistakes / errors in the banking systems as well. One such issue, though to a little extent, is the matter of mistakenly credited amounts to the customers’ accounts, due to system glitches. And unluckily, it is rare that the customers, who are beneficiaries of such mistaken credits, ever bother to intimate the banks about it or return the mistakenly credited amounts. The recovery of such amounts is though legally possible, however, since it is civil cause action, falling within the jurisdiction of civil courts, therefore, it becomes cumbersome for the banks to recover such amounts, easily and speedily. Needless to mention that the subject recovery does not fall within the jurisdiction of the Banking Courts and hence, speedy trial / summary procedure trial is not available for this kind of recovery. In addition, it is also difficult in these cases to have the support of the law enforcement agencies, due to some legal framework’s problems. Luckily, a learned Judge of the Lahore High Court Lahore has recently passed a remarkable judgement on the subject matter, which will support the banks, in such matters. The judgement is regarding a case, where a bank’s system mistakenly credited a significant amount to one of its customers, who utilized a major portion of the amount . The bank pursued the customer and he gave a cheque for the amount involved. The cheque was later bounced, due to insufficient funds in the account and the bank then lodged FIR against him under Section 489-F. He was arrested and his bail was refused by the lower Court, against which he approached the High Court. The High Court observed that the amount received by customer was not meant to be utilized by him, but it was to be retained and preserved by him for return back to the bank. The Honourable Court further observed that the customer was supposed and required to inform the sender/bank regarding the error and make arrangements for its return to the owner/bank. Furthermore, the Honourable Court observed that as soon as the customer became in a position to exercise his control over the property, the property stood entrusted to him impliedly, but he instead of returning the same to its owner/bank, withdrew significant amount and embezzled the same, as such offence punishable under Section 406 of PPC was fully attracted against him. This case will become a precedent that if a bank customer receives mistakenly credited amount in his account and utilizes it, then it will be an offence of Breach of Trust, under Section 406 of Pakistan Penal Code. The Judgement is reported as PLJ 2025 Cr. C 797 LHC.

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