The International Monetary Fund (IMF) while welcoming the Federal government's intention to reduce the budget deficit and ill-targeted subsidies has said that the Fund needs clarification on a number of elements before making a full assessment of the budget 2011-12.
David Hawley, Senior Advisor of External Relations Department, IMF said while addressing a press conference posted on the IMF website: "We welcome the intention to reduce the budget deficit and ill-targeted subsidies, but a number of elements have to be clarified before we can give a full view, a full assessment of this budget and we're in contact with the authorities in that regard".
The Federal government has taken a number of measures to satisfy the IMF in the budget for 2011-12. These measures include 4 percent fiscal deficit (Rs 810.64 billion), a net revenue collection of Rs 1543 billion, and a 229 billion rupee reduction in subsidies in comparison to the revised estimates for 2010-11.
The government, however, failed to meet its budgetary revenue targets in 2010-11 under direct and indirect tax collection. In addition, it was also unable to effect austerity measures reflected by a rise in allocation for current expenditure by a hefty 298 billion rupees in relation to the budget target for 2010-11 and a massive slash in the federal Public Sector Development Programme.
These factors may well account for Hawley's statement emphasising the need for clarification. However, well-placed sources told Business Recorder here on Friday, "now the ball is in the court of IMF. Whether they are satisfied with these budgetary measures or not depends on the Fund".
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