- Minister of State for Finance says agreement on 9th review was delayed because IMF is not ready to reduce external financing requirement to $3 billion
ISLAMABAD: Minister of State for Finance, Aisha Ghaus Pasha Thursday said the agreement on 9th review was delayed because the International Monetary Fund (IMF) is not ready to reduce the external financing requirement to $3 billion and categorically stated that there is no Plan-B and the government is committed to the IMF programme.
This was stated by the state minister during a meeting of the National Assembly Standing Committee on Finance presided over by Qaiser Ahmed Sheikh on Thursday.
She said that the IMF did not budge from $6 billion external financing needs.
We have requested the Fund to reduce the external financing needs because the current account deficit was significantly curtailed besides other measures, she said.
Additionally, the Fund was informed that the government has arranged $4 to $4.5 billion with $2 billion assurance from Saudi Arabia, $1 billion by the UAE as well as $450 million by the WB and $250 million by the AIIB and release of tranche by the IMF would build market confidence and open other avenues of external financing. However, the IMF did not agree to reduce the external financing needs to $3 billion.
This has been the primary reason for the delay in the staff-level agreement (SLA), the minister added.
After the prime minister spoke to the IMF MD on external financing, now the IMF requirement is budget numbers of the 10th review and we are sharing these numbers with the Fund. We are waiting that they should see these numbers and hopefully, we will move towards a SLA agreement.
She added that there was back and forth on the external financing issue and now the prime minister has spoken to the IMF MD and both have emphasized the importance to complete the ongoing programme.
She said that there is no option under consideration other than the IMF. She categorically stated that no Plan-B was under consideration. The minister said that the government is committed to the IMF programme and there was an understanding between the prime minister and the IMF MD that it is important to complete the ongoing programme.
On the agenda item of the budget strategy paper, the minister of state for finance said as per the Financial Management Act, the Finance Ministry is required to present the budget strategy paper to the committee, however, as the prime minister has constituted eight special committees.
These committees will give proposals for the various sectors and the recommendations of these committees will be part of the budget strategy paper.
Once these recommendations are incorporated and the budget strategy paper is approved, then it would be shared with the committee, said Pasha.
She said that the budget strategy paper would be shared with the committee ahead of the presentation of the budget in Parliament.
The minister said that these committees are working on two aspects –measures to be taken in the upcoming budget to resolve the difficulties faced by these sectors and what vision should be given about these sectors.
Ali Pervez Malik said that the committee should be briefed about the broader framework as how the government, struggling to achieve Rs7.6 trillion revenue for the ongoing fiscal year, would realize Rs9.2 trillion revenue for the next fiscal year.
Would it be by burdening existing taxpayers or bring in new taxpayers, he said the members wanted to know the answer to these questions. He said that the budget strategy paper is an important part of the budgetary calendar and nothing should have caused its delay as per rule and law. He said that only nine days are left in the presentation of the budget and the government has not presented it to the committee.
Nafeesa Shah said that the budget strategy paper was always provided to the committee one month ahead of the presentation of the budget. Upon this, the minister said that these are difficult times and extraordinary circumstances, so the budget strategy paper could not be finalised in time.
She added that as per the PFMA, the budget strategy paper should have been placed on the Finance Ministry’s website by April 15 and the finance minister should have presented it to the concerned standing committee as well.
The Committee has expressed annoyance over the absence of Finance Minister Ishaq Dar with members demanding not to take up any agenda of the government in future if the minister does not turn up.
Soon after the proceedings of the committee started, the chairman of the committee as well as the members noted the absence of the minister and stated that he never attended the committee meetings.
Minister of State for Finance Aisha Ghaus Pasha said that at present, the finance minister in a meeting in the Prime Minister’s Office. Finance Minister is busy due to political and economic matters.
The finance minister has not been busy as he was holding meetings with everyone but is not giving importance to the committee, the committee chairman said.
Nafeesa Shah said that the Parliament has enacted contempt of parliament legislation, and the chairman has the power of taking action.
The chairman of the committee said that there was no point in calling the committee meeting if the finance minister does not give any importance to it.
Copyright Business Recorder, 2023