IQBAL works as a driver with a rent-a-car company. He is usually working six to seven days a week. The company pays him around Rs30,000 as salary. He does make some more as overtime, and though that amount varies by the month, on average he gets another Rs20,000 or so. Adding tips to the total, he makes around Rs65,000 per month. He has a wife and two children who are still in school.

Up to a couple of years ago, Iqbal was able to save a bit every month from his income. But the inflation over the last few years has made his budget a lot more constrained. He is barely able to meet all his routine expenses now. Electricity and gas bills have increased a lot. And the food bill has also almost doubled. He is actively on the lookout for extra driving jobs now so that he can get more overtime payment. He has started skipping lunch unless a client is generous enough to give him lunch or money for lunch.

This is not an isolated case. In their article (‘People are eating less’) in this paper last week, Zafar Mirza and Miftah Ismail, giving numbers from the Household Integrated Expenditure Survey 2024-25, have shown that people are indeed eating less and they have had to tighten their belts further to make ends meet. And this is true for not just lower-income groups but middle-income groups as well.

What has made life a lot harder for Iqbal and his family has been a health shock. His wife has blood pressure and diabetes and has recently been diagnosed with some liver ailment. Doctor’s fee, expenses for diagnostic testing and regular costs of medicines have pushed Iqbal into debt. He has been forced to borrow from his relatives, friends and any clients he felt would be kind enough to help him or lend him money.

We need to start thinking about how we can create more income-generation opportunities.

Each month is a struggle now. Medical expenses are a constant addition to his monthly expenses, but his income has not gone up and there does not seem to be any prospect of income growth either. He has essentially fallen into a debt trap. He has accumulated a significant amount of debt, which there is little possibility of paying, and has no ability to raise further debt. But monthly expenses continue to be higher than his income.

What is a person like Iqbal supposed to do?

This is not the story of just one household in Pakistan. It is the story of a significant proportion of the population of the country. If people have no savings, shocks can be devastating and can push households into debt and poverty. The most common shock seems to be health shocks. For a household of five to six people — the norm in Pakistan — with one or two earners, and with grandparents and children, health shocks are not a surprise at all.

Diabetes, blood pressure, hepatitis, tuberculosis, and many other ailments — a lot of them requiring medium- to long-term and continued care — are quite common in Pakistan. With 40 per cent or so of children afflicted with malnutrition, youngsters falling ill is not unexpected either.

The state does not provide good healthcare facilities. Public sector provision is not only patchy and of poor quality in general, it is also not available everywhere. And private healthcare is expensive. Whenever Iqbal has taken his wife to the public hospital, he has been told to get diagnostic tests done from private laboratories and he has also had to pay for all the medicines. Only the doctor’s fee is subsidised by the state. But diagnostic tests are quite expensive. Medicines, too, are expensive and have become even more costly over the last few years.

Do bear in mind that we do not provide any income support through our social protection institutions and programmes to those who are above very low-income levels. The Benazir Income Support Programme is for the very poor and does not extend beyond. There are no programmes for the working or low-income poor.

What could be the way out for Iqbal? Can he increase his income? He could try to work more hours. That is not easy though. He could pull out one or more of his children from school and push them into the workforce. But given the unemployment rates in the country, this is not much of an option, especially if the children are still in the early to middle stages of their education. And the loss in terms of a child not completing his or her education is seen in the medium- to long-term damage to the country.

It is at the level of the state that we can actually change things. In fact, it is the responsibility of the state to do so. A large proportion of Pakistanis have fallen on hard times, even a larger proportion has become more vulnerable to shocks than before. It is the responsibility of the state to do something about this. It is here, even in terms of intentions, that we do not find anything. We need to start thinking about how we can create more income-generating opportunities for people. And we need to think about extending support to those who are falling on hard times. Probably the best way to do this — and this is being done and has been done in many countries — is to extend health and education facilities of decent quality to all citizens, especially those who are struggling. This could help a lot of people in major ways. But, of course, in an elitist and elite-captured state, this will not happen easily. It will require a major overhaul of the governance system and governance ethos in the country. This, at least for now, does not seem to be on the horizon.

The writer is a senior research fellow at the Institute of Development and Economic Alternatives and an associate professor of economics at Lums.

Published in Dawn, January 16th, 2026