Pakistan confident of getting IMF loan tranche in December

ISLAMABAD Pakistan is confident of getting remaining amount of the International Monetary Funds standby loan in December, as the Government claims it has made substantial progress on conditionality to qualify for the review early next month. Secretary Finance Salman Siddiq told TheNation on Wednesday that the Government had already initiated power sector reforms after preparing a workable plan in consultation with the World Bank and the Asian Development Bank. He said Special Secretary Finance Wajid Rana left for Washington last night to join Pakistani delegation for annual fall meetings of Fund. The delegation including Finance Minister Abdul Hafeez Shaikh and the Deputy Chairman Planning Commission would apprise IMF of power sector rehabilitation plan on the sidelines of the ongoing meetings. Second commitment with the IMF was the introduction of the reformed General Sales Tax (GST) that is already in process as draft law is almost ready. The revised draft, he said, based on the understandings signed with the provinces on collection of the reform GST on services was ready and it would soon be presented to the Parliament for enactment. When asked about the October 1 for introduction of the reformed GST, he said it was a self-imposed deadline that the Finance Minister had given in the budget. The Government has done its part of the task of getting the provinces on the same page and drafting the law accordingly. Since Parliament is independent in its proceedings and the Government cannot force them. That is why, he said, the Government was not in a position to give exact date but the GST reform would be imposed as soon as the Parliament passes its law. Earlier while talking to TheNation, Dr Hafeez Ahmed Pasha, member of governments penal of economists, opined that it was not good that the Government had been constantly failing to fulfil its commitments with the IMF. Asked about the threats of derailment to the IMF programme due to the Governments failure in meeting its targets, he said, It is already suspended and the Government has been avoiding reviews for the last many months. And its resumption was only possible when the Government would ask for review of the economy after taking steps committed to the IMF. The Government is trying its level best to go through next review successfully in November or preferably in the end of current month so that the IMF executive board meetings late in November or early December could approve release of remaining funds under the standby loan. According to IMF, the Government is spending a lot of money on subsidising power. I believe the figure is $2 billion a year. And much of that goes to people who are relatively well off. Its an untargeted subsidy to hold the prices down, stated Caroline Atkinson, IMF Director of External Relations in press briefing on September 23. It doesnt particular help the needy and the poor, whilst at the same time, the constraints on prices are part of the problem that leads to pretty frequent power shortages and power outages. So it is important, as the Government of Pakistan has said, to reform the power sector so that you have more reliable service, and also so that support is directed at the poor and the needy, and not in an untargeted fashion, just through a general price-lower prices, she maintained.

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