RESTORATION OF IMF PROGRAM

A statement issued by the IMF from Washington after the talks between the International Monetary Fund (IMF) and Pakistan and the confirmation statement of the Pakistani finance minister on Twitter made it clear that Pakistan and the IMF have been at a standstill since January last year. IMF has agreed to revive the 6 billion loan program, while Pakistan has promised to meet several conditions of the International Monetary Fund, including an increase in the price of electricity by Rs 3.90 per unit, the corporate sector income tax exemption from 150. It also includes points such as raising Rs 200 billion, cutting costs and structural reforms. Finance Minister Hafeez Sheikh termed the decision taken at the staff level as a good development for Pakistan. One of the reasons for the stalemate in the IMF program since last year was Islamabad’s delay in raising electricity tariffs and imposing additional taxes, but some of the steps to be taken may have already been taken. According to Finance Ministry documents, the government has cut defense and development spending in the first six months of the current financial year. Under the agreement, the government will have to further reduce electricity subsidies in the next budget. According to sources, at the IMF Executive Board meeting following the final approval of the review mission, Islamabad will receive the 500 million loan. It is clear from the statement issued by the IMF that a package and reform program has been agreed in the talks. The package aims to balance the Pakistani economy. It has also been agreed to conduct an audit of Coronavirus costs. The statement acknowledged that Pakistan was trying to achieve the goals of the loan program. The government is changing the rules for the autonomy of NEPRA while legislation is also being made for the autonomy of the SBP. The statement said that legislation has also been promised to reduce the losses of Pakistani government institutions. The list of IMF terms and government assurances that have emerged includes an attempt to finalize the Financial Action Task Force’s action plan, which according to official sources is largely nearing completion. Many issues are being addressed, including measures to reform the power sector and reduce losses in the energy sector. But whatever the benefits of introducing large-scale reforms at once, it has a disturbing effect on the conditions of the people. The financial institution should take into account the government’s obligations in this regard. The IMF has acknowledged a number of positive developments, including a drop in imports, an increase in exports, remittances and an increase in foreign exchange reserves. According to the claim of Federal Minister Asad Omar, the sectors of industry and agriculture are also improving, but the important thing is what initiatives are being taken to get the support of the opposition in fulfilling the legislative promises made in many matters. The need for resolving public issues and providing relief in terms of IMF terms should not be underestimated. Half of the current government’s constitutional term has passed. The 2023 general election is not far off. Therefore, in spite of all the difficulties, the present government has to work carefully and actively for the betterment of the common man.

Thanks for reading!