In a bid to accept the International Monetary Fund (IMF) conditions to increase revenue, the government is considering reducing the number of power lifeline subscribers. With this, the subsidy on electricity is likely to be reduced from Rs140 billion to Rs54 billion.
The subsidy reduction applies to domestic consumers and will amount to Rs86 billion.
The IMF has demanded that the subsidy should be given up to 200 units instead of 300 units. Electricity can be expensive for those who spend 201 to 300 units, according to IMF officials.
Furthermore, IMF is also asking the government to increase electricity prices should be increased by Rs3.34 per unit.
IMF WANTS GOVT TO INCREASE ELECTRICITY PRICE BY RS6.34
Tarin told the NA committee that a meeting was held with the Fund officials on Wednesday, during which it was relayed to the international money lender that an increase in power and gas tariff will hurt Pakistan’s industrial growth.
According to Tarin, the IMF executive body will meet in September to approve Pakistan’s case. He added that the meeting was supposed to take place in on July5-7, but now it will be held in September. He further said that till September, the Fund will monitor Pakistan’s performance and added that both IMF and the government wanted a stable economic outlook. The finance minister said that the government will issue Sukuk and green bonds to boost its dollar reserves.
The finance minister also talked about the Federal Board of Revenue (FBR), saying the tax watchdog is ill-prepared to collect revenue. He added that the government will send notices to 7.2 million tax evaders via third parties as it doesn’t trust FBR. “We fear that FBR will strike a deal with tax evaders,” he said, adding that the government has withdrawn power of arrest given to the FBR’s assistant commissioners.
On June 15, it was reported that the burden on the public would likely increase in the next financial year owing to a potential increase in electricity and gas tariffs by October this year. The increase, however gradual, will be made on the demand of the IMF as an attempt to break the deadlock between Pakistan and IMF on the issue.