Pakistan Budget 2021-22: Ignoring IMF terms, what could be the future of the program with the International Monetary Fund?

 

Pakistan Budget 2021-22: Ignoring IMF terms, what could be the future of the program with the International Monetary Fund?

The budget presented by the Federal Government of Pakistan for the financial year 2021-22 has taken steps under certain conditions of the International Monetary Fund (IMF) but on the other hand some such measures have been included under these conditions. Not even what is needed to continue the IMF program in the future?

The budget deficit presented by the government of Pakistan is estimated at Rs 3,420 billion, which the government has to meet by issuing loans, grants and bonds in international markets from international financial institutions and foreign countries.

According to experts monitoring the country's economy, in order to stay in the IMF program, its conditions must be met and Pakistan can get concessions from the IMF in this regard, but it depends on the region and the international situation. Also depends.

According to experts, while international financial institutions have an apparent financial aspect, they also have a secret political agenda that is interconnected.

What were the EMF terms?

When the IMF reviewed its 6 billion programs with Pakistan in February this year, it called on Pakistan to take some steps in the new fiscal year budget to continue the program.

Economist Dr Farrukh Saleem said the IMF had called for four steps in its February review.

Under the first condition, Pakistan has to collect additional taxes of Rs 1,200 billion in the next financial year. The second condition was to deposit Rs 900 billion more in the power sector, that is, to increase the electricity tariff by about Rs 6 per unit.

Under the third condition, Rs 610 billion was to be deposited in the Petroleum Development Levy (PDL), while the fourth condition was to abolish the tax exemption of Rs 140 billion given to the corporate sector.

What could be the implications of ending the IMF program?

On the one hand, Pakistan will be deprived of loans from the IMF, on the other hand, there will be less hope for investment from other international financial institutions and the global market.

Former Finance Minister Dr. Hafeez Pasha said that the government was trying to stabilize the economy but the budget deficit was a big problem.

Dr. Farrukh said that Pakistan needs about 30 billion in financial growth in the next financial year in which the IMF program can be helpful.

He said that not only would the IMF program provide money from there, but other international financial institutions such as the World Bank and the Asian Development Bank also provide financial assistanc Can Pakistan get concession from IMF?

 Dr. Ikram-ul-Haq said that in general, the IMF program is rarely discounted, but in the past have been.

He said that Pakistan could also get a concession in case of non-compliance with the conditions and the program could continue but it could be determined by regional and global conditions.

He said that the situation in Afghanistan and the US need for Pakistan there could also help us in this regard as the US has immense influence in these international organizations.

Dr. Ikram said that one of the important developments in getting any concession is the FATF meeting to be held in the month of June.e to the country on the basis of the IMF program.