IMF’s demands


Initial reports about the finance ministry’s fresh interaction with the International Monetary Fund (IMF) to restart the stalled Extended Fund Facility (EFF), not denied by the government so far, carry no surprises. Apparently the Fund wants the electricity tariff increased by Rs1.4 per unit, steps to increase income tax, sales tax and regulatory duties, privatisation process to be expedited and, most importantly from the government’s point of view, abolition or significant reduction in all kinds of subsidies.
These are just the kind of steps that Prime Minister Imran Khan refused to comply with just before the pandemic and led to the disruption of the program in the first place. Yet with time the government also realised that it had no option but to bend to some of the demands, at least, and since the country simply cannot do without the bailout program in the present circumstances, chances are that these suggestions will now have to be incorporated without much argument. But that’s not very good news when it comes to the present year’s budget, so surely the finance ministry will try to wriggle around some of the suggested measures at least.