Talks in Islamabad from March 1

Finally, the International Monetary Fund (IMF) has issued a new advisory, accepting Pakistan''s request to hold a week-long review of its economy in Islamabad from March 1, and see itself the decisions Islamabad takes for the remaining four months of the current fiscal year to contain the growing budget deficit and keep inflation within given target of single digit by the end of the fiscal year.
Earlier, IMF had shown willingness to review Pakistan''s economic situation and see what it has to do to improve its key economic indicators by the end of this fiscal year, but it hinted at conducting the review in Dubai. Pakistan, having serious problem on economic front and looking for every possible window to get much- needed budgetary support to close up financial year at a positive note, has been continuously pursuing the fund to send its mission to Islamabad.
A senior Finance Ministry official told Business Recorder that IMF has agreed to send its mission to Pakistan rather than to Dubai and therefore the two sides are going to start a week-long discussion on economic situation in Islamabad from March 1. The fund mission is expected to reach to Islamabad by February 28 evening. Some officials of the IMF are right now in Dubai to take flight for Islamabad on February 28, the official said.
Pakistan will present its economic performance report to IMF mission which included revenue collection in the first eight months of the current fiscal year, debt servicing and trade balance situation. The fund will also be informed about the steps that are under consideration to improve revenue collection and curtail expenditure to keep budget deficit at some acceptable level. Pakistan will also apprise the mission on the taxation measures to be put in place from April 1, primarily to enhance revenue collection to achieve targeted figure of Rs 1652 billion.
The possible taxation measures are imposition of flood surcharge, enhancement of import duty across the board from one to two percent and a cut in subsidy on electricity to zero level. The government has already hinted at an upward revision by 5.5 percent on power besides removing cap on petroleum products prices from April 1.
The recent capping of petroleum prices has annoyed the IMF and other donor agencies which are consistently issuing warning to Islamabad for drastic improvement on economic front. Since December last capping of petroleum prices has added Rs 24 billion to the government burden besides giving a negative signal to the IMF.
The officials in Islamabad say that all issues from RGST and new tax measures to ending subsidy for power sector and cutting down expenditure will be on the agenda when IMF mission starts review of Pakistan''s economy in Islamabad from March 1.