Pakistan should cut costs, end subsidies on electricity, IMF

Web Desk: The IMF has asked the federal government for a moratorium ahead of initial talks on a new long-term loan program of $6-8 billion.
In a briefing to the IMF, the FBR informed that at the end of the current financial year, there may be a shortfall of Rs 163 to 183 billion in tax collections.
On the FBR’s briefing, the IMF negotiation team demanded the government of Pakistan to reduce its expenditure to the extent of short fall. Along with this, he also expressed his desire to end subsidy on gas and electricity.
In this regard, the ongoing report of the IMF states that Pakistan’s uncertain political situation and social tension may affect the policies of economic stability.
The International Monetary Fund also provided the federal government with policy guidelines for the energy sector in the next fiscal year’s budget.
According to the sources, in this guideline of IMF, electricity and gas rates for the next financial year should be fixed in time. At the same time, the IMF negotiating team also demanded an end to tubewell subsidies.
Along with this, the IMF has also indicated to end concessional gas rates for industries in the upcoming budget.
Apart from the government expenditure, the demand of the IMF to increase the basic electricity rates from July 1 this year is also gaining momentum.
It should be remembered that with regard to the new program, the IMF staff has said that the downside risk of Pakistan is very present.