IMF talks begin today
ZAHEER ABBASI
ISLAMABAD: Secretary Finance Dr Waqar Masood said that discussion with the International Monetary Fund (IMF) on eighth review of $6.64 billion Extended Fund Facility (EFF) would begin from today (Wednesday) in Dubai.
Talking to media persons after a meeting of Senate Standing Committee on Finance, he said that the review would continue till August 6 in two rounds – technical level discussion to be followed by policy level talks from August 3. He added that talks would be held as per agreed performance criteria.
An official on condition of anonymity said the economic team led by Finance Minister Ishaq Dar is expected to request for a waiver with respect to possible slippage in fiscal deficit. The agreed Federal Board of Revenue (FBR) revenue collection target of Rs 2691 billion was missed by a considerable margin as fiscal year was closed with Rs 2588 billion revenue collection, reflecting a shortfall of Rs103 billion. The government is also expected to make an increase in gas tariff from August 1 to comply with agreed commitment with the Fund.
Sources said discussions on the eighth review are expected to dominate power sector and broadening of tax base where government performance remained poor with ever increasing power sector recoveries that compounded the problem of circular debt. They added that the government’s entire focus appears to be on increasing power tariff to deal with the problem of circular debt instead of addressing the structural issues of theft and losses including administrative, transmission as well as distribution losses.
According to the IMF report uploaded on its website after the conclusion of seventh review, the stock of power sector payables reached Rs 615 billion end-March 2015. Payables comprise the circular debt (PRs 280 billion payable toward power sector entities) and the stock of arrears covered by the Power Sector Holding Company Limited (PHCL) (PRs 335 billion). Additionally, the report also stated that the gas price notifications are normally done on a bi-annual basis in January and July of every year. Due to political protests, they have been postponed since 2014, the report added.
