Bailout package’s draft ready as Pakistan accepts several demands of IMF
ISLAMABAD (92 News) – The draft for International Monetary Fund (IMF) bailout package has been prepared as Pakistan accepted the major demands of IMF on Saturday.
According to the sources of Finance Ministry, Pakistan has accepted major demands of the IMF for bailout package in the draft agreement. However, It also said that over strict terms and conditions posed by the IMF on Pakistan for a bailout package, Prime Minister Imran Khan has expressed reservations.
The sources further said that the premier seeks soft terms and conditions from the IMF regarding inflation, particularly relaxation in a larger tax rebates and exemptions. Moreover, PM Khan has directed concerned officials to persuade the IMF for a reduced tax collection target.
Following to this, the PM has summoned an important meeting on Monday to examine financial affairs, the tax amnesty scheme and the IMF deal. Several members of the federal cabinet will also attend the meeting.
It was reported that the government has accepted several demands of the IMF, including the increase in electricity and gas prices in the country. The Pakistani officials bowed down before the IMF and accepted the condition for removing subsidy on agriculture, devaluation of rupees as wells as hiking the percentage rate of interest.
According to the spokesperson of Finance Ministry, it said only that “We have made good progress in our discussions with the visiting IMF mission. Consultations will continue over the weekend.”
Bailout package agreed as IMF rejects Pakistan’s six main demands
A day earlier, Pakistan and the International Monetary Fund (IMF) have agreed to the bailout package, rejecting six demands of Pakistan.
The final draft of the agreement is being prepared, while the announcement in this regard will be made shortly after approval from Prime Minister Imran Khan.
The rejected demands include interim fund for employees on privatization of the departments, reduction in interest rate on loans, subsidy on electricity and gas and an increase in taxes on salaries.
After the meeting, Finance Adviser Abdul Hafeez Shaikh and other economic team met Prime Minister Imran and briefed the latter about the final agreement.
The team also apprised the prime minister about the IMF bailout package and conditions of the IMF.
Prime Minister Imran Khan will grant the policy level to implement the bailout package.
Pakistan accepts IMF’s conditions for bailout package
Earlier on May 8, Pakistan accepted the conditions of the International Monetary Fund (IMF) for bailout package.
According to the details garnered, the federal government accepted the demand of the IMF of increasing electricity and gas prices in Pakistan. It also said that the consumers will pay Rs340 billion in three years for electricity and gas.
The government has also agreed to make the National Electric Power Regulatory Authority (NEPRA) an autonomous body to set electricity prices.
It further reported that only exporters will be given limited subsidy in industrial consumers. “The Oil and Gas Regulatory Authority (OGRA) will also be made autonomous in setting the prices,” it added.
Both the respondents already agreed on the amnesty scheme and it was said that the value of rupees fixed by the market. However, the taxes worth of 500 billion rupees will be increased within three years of the period. The government will not provide subsidy and tax relief to any department.