IMF puts five demands before Shehbaz Sharif govt

ISLAMABAD: The federal cabinet Wednesday expressed serious concerns on the economic situation of the country, with Minister for Finance and Revenue Miftah Ismail telling the press later on that the PTI government had laid down ‘atom bombs’ instead of landmines on their way out at the cost of national exchequer.

Speaking to the media at the National Press Club, the finance minister — accompanied by Federal Minister Information and Broadcasting Marriyum Aurangzeb — said the PTI government had left landmines for the incumbent government. He said the subsidy allowed for petrol for the months of May and June would cost Rs96 billion, and the current government could not bear that burden.

“By not taking tax on petrol and diesel, Imran Khan has put the Shehbaz Sharif-led government in trouble […] making petrol cheap is not a favour, it is the nation’s money through which they give subsidy,” the finance minister added. He said the government was giving a subsidy of Rs52 on diesel and Rs21 on petrol, and due to this, Rs68 were paid from the national exchequer in terms of April’s subsidy. “This is double the cost of administrative expenses of our civilian government. We cannot keep this up. The prime minister will have to take a decision in this regard,” he added.

According to the minister, the IMF has put five major demands before the Shehbaz Sharif government for slashing down the primary deficit by Rs1,300 billion through withdrawal of fuel subsidy of Rs150 billion on monthly basis and taking additional taxation measures for reviving the stalled Fund programme.

“The IMF shared a list of five conditions, including withdrawal of fuel subsidy, doing away with tax amnesty scheme, increasing power tariff, taking additional taxation measures and reducing the development program by Rs100 billion to bring it down to Rs600 billionthrough the Public Sector Development Program (PSDP) till end of the current fiscal year,” Miftah Ismail said in his maiden press conference.

The minister also hoped that China would roll over $2.4 billion in commercial loans soon and Islamabad was also expecting to get a rollover of safe deposits of $2 billion in May and July 2022. He said that the financing gap would be bridged to the tune of $8 to $9 billion by June 2022, so that foreign currency reserves would not deplete from the existing levels.

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