First quarter review of Pakistan’s implementation on the IMF programme is coming up – by the end of this month. Prior to the approaching review, the incumbent government’s economic team, led by PM’s adviser on finance Dr Hafeez Sheikh, held an “extensive session” in Washington over the weekend with Fund’s Managing Director Kristalina Georgieva and other senior officials to give them an overview of the implementation of the bailout programme. As claimed by the PM’s adviser, during the meeting, Georgieva recognised the “tough decisions” being made and implemented by Pakistan to stabilise the economy, and assured continued support to the reform process being carried out under the IMF programme.
While this assurance of continued IMF support, as claimed, is indeed welcome, the forthcoming assessment by the Fund is awaited in the country amid apprehensions of a mini-budget in view of the tax collection falling short by more than one hundred billion rupees in the first quarter of the ongoing fiscal year. As agreed with the global lender for the sake of the $6 billion loan facility, the government was to collect Rs1,071 billion in the first three months of FY2019-20, with the target for the full year being Rs5,550 billion. But the government could only manage Rs955 billion tax revenue in the July-September quarter which means a shortfall of Rs116 billion or nearly 10 per cent of the target.
Experts fear that government measures of make up for the shortfall and satisfy the IMF would force the masses into further belt tightening at a time when the prices of the items of daily use have already rocketed into the sky, the power and gas tariffs have undergone repeated increases, and petrol rates are unprecedentedly high. The government’s plan to abolish 400 departments and carry out cost-cutting would be an equally painful alternative. One can only hope the masses emerge from the month of October unscathed.
Published in The Express Tribune, October 22nd, 2019.