ISLAMABAD: The government’s economic team has reportedly failed to convince the cabinet members regarding the implementation of the reform agenda agreed with the International Monetary Fund (IMF) under the Extended Fund Facility (EFF).
According to sources Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh was in the favour of implementing the IMF conditions pertaining to increase in electricity tariffs, autonomy for State Bank of Pakistan (SBP) and amendment in National Electric Power Regulatory Authority (NEPRA) Act, however some cabinet members expressed their reservations regarding these conditions.
Earlier on July 16, Prime Minister Imran Khan had postponed the decision to increase the price of electricity for consumers of Karachi Electric Supply Company (K-Electric).
According to sources, the PM’s decision came after the Economic Coordination Committee’s (ECC) approval to increase the price of electricity for K-Electric consumers by Rs2.79 per unit.
Sources further said that consumers of K-Electric were getting electricity at a lower rate compared to the rest of the country.
According to sources, the IMF conditions also include amendments in SBP Act which will give autonomy to the central bank and changes in the NEPRA Act.
Earlier, on June 10, the government had introduced the Electric Power Act bill in the National Assembly, which is yet to be approved. The amendments would permit the federal government to pass on the cost of inefficiency and power theft to electricity consumers through the imposition of surcharges.
Sources further disclosed that the IMF also wants clarity on how Pakistan plans to improve its revenue during the current fiscal year. The government had earlier set a revenue target of Rs4,963 billion for FY21, after the approval of IMF.
The IMF team is due to visit Pakistan in September to review the implementation of the reform agenda under the Extended Fund Facility (EFF). The IMF might discontinue the facility if it finds the implementation of its conditions unsatisfactory.
Sources alleged that Dr Hafeez Shaikh might be asked to leave his position as the prime minister’s adviser if the EFF programme is discontinued. However, Ministry of Finance officials rejected this notion.