A media report on Wednesday said that Pakistan has not been able to meet three of the five targets set by the IMF for the second review of the $ 7 billion bailout package. According to the fiscal operations summer released by the Finance Ministry, due to an increase in spending, in the last financial year ended in June, the province targeted 1.2 trillion Pakistani failed to save the rupee. According to The Express Tribune newspaper, the Federal Revenue Board (FBR) also could not fulfill his two major conditions to collect 12.3 trillion Pakistani rupees revenue and 50 billion Pakistani rupees from retailers under the Tajir Dost Yojana during the last financial year.
However, Pakistan managed to meet an important target of generating a 2.4 trillion Pakistani rupee with total revenue collected by four provinces. This is the second consecutive year of primary surplus and the highest in 24 years, which has crossed the IMF target. The report said that the Finance Ministry made a lot of efforts to stay on Fiscal Path, but a shock from the provincial capitals, which are not under the control of the federal government. The total fiscal deficit has also come down to 5.4 per cent of the GDP or 6.2 trillion Pakistani rupees, which is much lower than the original target of 5.9 per cent. The Finance Secretary kept a close watch on the expenditure throughout the financial year.
50 conditions of IMF
The IMF has laid about 50 conditions in total under the bailout package of US $ 7 billion – some of which are monitored on quarter and annual basis and these loans are associated with installments. The government has managed to achieve relative fiscal stability, but official data shows that the net revenue of the federal government is still less than only two items: interest payment and defense spending, 1.2 trillion Pakistani rupees are less than the requirements. The rest of the expenses and loans are done.
The province remained behind the target
According to the Ministry, against the Primary Surplus target of 2.4 trillion Pakistani rupees, the federal government has recorded a 2.7 trillion Pakistani rupee or 2.4 percent of the GDP (GDP). The provincial governments had given an agreement to the IMF and the federal government to generate a cash surplus of 1.2 trillion Pakistani rupees.
However, the four provinces collectively generated a cash surplus of 921 billion Pakistani rupees, which is lower 280 billion Pakistani rupees than the IMF target. FBR failed to collect any important revenue under the Tajir Dost Scheme against the target of 50 billion Pakistani rupees for the last financial year.
The report stated that despite these deficiencies, due to progress on other important standards, the government is unlikely to face serious obstacles during the next month to release the next 1 billion US dollars installments – which is expected to begin next month – during the next month. The 7 billion US dollar package was agreed last year, and it has been helpful in stabilizing the country’s economy.