The International Monetary Fund (IMF) has demanded Pakistan to provide all details of its financial assistance deal with China.The IMF mission is in Pakistan and is holding talks with officials over arranging an unspecified amount to help in addressing the balance of payment issue. As talks enter the final phase, IMF set stricter conditions for Pakistan to implement in exchange for a bailout package much needed for economic revival of the cash-strapped country.
Some of the major conditions include imposition of more taxes worth Rs 15000 crore, further reduction in the rupee value as well as a tighter monetary policy.
Finance Minister Asad Umar said on Monday that the talks were moving ahead positively but there were still differences, the report said.
“There are still gaps in the position of the IMF and the position that we have,” Umar said after a series of meetings with an IMF team. Umar said the IMF visit would conclude on Tuesday and he had no funding emergency to worry about day after tomorrow.
He said that $100 crores of the $300 crores committed by Saudi Arabia had been remitted to the State Bank of Pakistan on Monday and the remaining $200 crores would follow over the next few days.
Pakistan looks forward to about 600 crores financial bailout for averting its balance of payments crisis.
Informed sources said the two sides had a wide gap in their positions on the need for increase in electricity tariff, upward revision in the revenue target and additional tax measures on matters relating to Chinese assistance and its impact both inflow and outflow.
The sources said the IMF also demanded that the provincial governments finance the Benazir Income Support Programme (BISP), instead of the federal government, and wanted committed cash surpluses to minimise the consolidated fiscal deficit.
IMF wanted a clear roadmap for elimination of power sector circular debt that currently stood at 1,20,000 crore rupees and welcomed administrative measures to recover some arrears, but insisted on further increasing electricity rates for full cost recovery of power supply..
The sources said the IMF team was not satisfied with the power sector reforms plan and wanted the government to surrender its powers to set electricity tariff and let these be independently dealt with by the power regulator.
Pakistan’s current account deficit widened 43 percent to $1800 crore in the fiscal year that ended in June, while the fiscal deficit has ballooned to 6.6 per cent of gross domestic product.