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Pakistan

Miftah says Punjab govt's electricity subsidy should not worry IMF

  • Finance Minister says subsidy offered by the province is out of the global lender's scope
Published July 5, 2022 Updated July 6, 2022

Finance Minister Miftah Ismail looked to pacify concerns over the Punjab government's electricity subsidy announcement, saying that the International Monetary Fund (IMF) should not be worried about the province’s move to provide free electricity to households consuming up to 100 units.

Speaking on the Aaj News programme, Faisla Aap Ka, on Tuesday night, the finance minister said that it is a "good subsidy."

Households using up to 100 units of power to get free electricity: CM Hamza Shehbaz

Explaining why the subject is out of IMF's scope, he said that provinces are given money by the federal government which they spend on different projects.

"I have given the money to provinces. What they do with that money is their concern," he said.

The finance minister said that his responsibility is to reduce the budget deficit, collect revenue and give money to the province.

"I have done all three," he remarked.

Miftah said that he was in touch with the IMF on daily basis.

When asked if he was being removed as the finance minister, he said: "At this point, there is no indication to me that I am being removed."

"I have not resigned. The Prime Minister never asked me to resign, nor did I offer my resignation."

He warned that if petrol prices increased in the global market, then the government will have to pass on the burden to the people.

Miftah Ismail reiterates ‘IMF program on track’, dismisses reports of delay

The explanation comes at a time when the incumbent government has been actively pursuing the IMF to revive its stalled Extended Fund Facility (EFF) programme.

Last week, Pakistan received combined economic and financial targets for the seventh and eighth reviews of its IMF bailout programme, said Miftah.

He said the government had received the lender's Memorandum of Economic and Financial Policies (MEFP) for both reviews, following meetings last week between the two sides.

The IMF programme is widely seen as crucial for Pakistan's economy, which has struggled with high inflation and a widening current account deficit.

Last month, Pakistan and IMF made progress on the budget measures for 2022-23, with additional policy actions committed by Islamabad to revive the stalled EFF including generating more taxes and increasing the petroleum levy from July 1.

The agreement led to the imposition of a 10% poverty alleviation tax or super tax on 13 sectors, including cement, steel, sugar, oil and gas, fertiliser, LNG, textile, banks, automobile, beverages, chemicals and tobacco sectors.

Pakistan entered the 39-month, $6 billion IMF programme in 2019, but less than half of the amount has been disbursed to date as Islamabad has struggled to keep targets on track.

Comments

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Tariq Ahmad Jul 05, 2022 11:33pm
Negotiating with yourself. Really, when was the last time you went to get a loan.
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