IMF Directs Pakistan Not to Allow Supplementary Grants Until Formation of New Govt

The International Monetary Fund (IMF) has directed Pakistan not to allow supplementary grants until the formation of a new government after the elections. Sources told ProPakistani that the Finance Division has written a letter to all ministries and divisions about commitments under Stand-By Agreement (SBA) with the IMF. Pakistan is currently under a SBA with the IMF wherein several commitments have been made to achieve macroeconomic stability. These commitments are fundamental to keeping the program on track and achieving fiscal targets under the SBA. In this regard, the government has committed not to allow supplementary grants for any unbudgeted spending including federal grants, over the parliamentary approved levels in FY2023-24 until the formation of a new government after the elections. In addition, Pakistan has also committed to the IMF that it will avoid the practice of issuing new preferential tax treatments or exemptions besides granting further tax amnesties. Moreover, Pakistan has also agreed with IMF that it will not introduce any subsidy or cross-subsidy scheme, in FY24 and beyond. The commitments are critical for achieving program targets. The Finance Division has asked all ministries to ensure that proposals in contravention of these commitments are not submitted before competent foras such as the Federal Cabinet and its committees, CDWP, ECNEC, etc. It further requested that the commitments with the IMF be brought to the notice of institutions/autonomous bodies and organizations under the administrative control of the respective Ministry/Division to ensure compliance.