KARACHI - The IMF-support financial assistance programme which is set to be completed in next two years (FY09-10) would have negative repercussions on GDP growth and different sectors of economy despite government target of achieving macroeconomic stability by improving macroeconomic indicators and easing off balance of payments and fiscal pressures being persisted on the economy for the last financial year. Tight fiscal, monetary and taxation measures which are believed to be taken by the government within the specific course of upcoming financial years in different phases are assumed to bolster the depleting foreign exchange reserve outlook, narrow fiscal deficit, curtail inflation and restore exchange market stability. However, cut in power and energy subsidies coupled with substantial decline in development expenditure is anticipated to hamper the GDP growth and other productive sectors of economy such as agriculture, large-scale manufacturing and services. In the post IMF disbursement scenario, the GDP growth is projected to decline at 3.5 percent (200 bps lower than government's target of 5.5 percent) in FY09, dropping below the 4 percent level for the first time in fifty years and 7 years low of average GDP growth of more than 5 percent. Contrary to this assumption, some experts expect the growth rate to be around at 5 percent, due to bumper agriculture crop and strong performance of the heavy weight wholesale and retail segment in the service sector. Industrial growth is likely to post a 0.6 percent decline in FY09 as against 5-year (FY04-08) average of 6.3 percent. Moreover, service sector is also expected to slow down to 5 percent after growing at an average of 8 percent over the last 5 years (FY04-FY08) due to visible change in performance of banking, telecom, insurance and other services. According to some independent studies, the agriculture sector growth is estimated to rebound to 3.3 percent in FY09 on the back of better performance of major crops such as wheat, rice and cotton due to more focus towards agriculture sector by the current government. Moreover, a sharp fall in cotton prices could also help some recovery in textile production in the second half of FY09. However, in case of water shortage and crop damage due to virus the agriculture growth is likely to post growth of 1.9 percent in the 2H of FY09. Industrial growth could remain under pressure if international commodity prices revert to higher levels and cost of borrowing rises further. Talking to The Nation, renowned economist Dr. Qazi Masood said that the agriculture sector has estimated to generate potential revenue of Rs 10 billion one this sector brings into the text net which is one of the basic features of the IMF funding agreement based on the targets set by the government itself to achieve economic stabilization. He said according to "Horizontal Equity Basic" principle, agriculture is considered as an income generating sector which has capacity to be created Rs 10 billion, out of Rs 350 billion total income tax collection. In another fiscal theory called as "Individuals versus to Sector for Taxation Purpose", agriculture tax should be imposed on sector rather individuals which if get materialized would not only increase the amount of tax revenue to GDP but also augment the growth rate FY09. It is worth noting that IMF is being focused on tax reforms, bringing sectors such as agriculture and certain services sectors into the tax net. However the government has declined to levy a tax on real sector.