Finance Minister Miftah explains that the government will not announce any mini-budgets in the current fiscal year.
ISLAMABAD – Pakistan is reported to receive about $10.5 billion from friendly countries and international financial institutions in the current fiscal year following the agreement with the International Monetary Fund (IMF) to revive the loan program.
Addressing a press conference with Information and Broadcasting Minister Marriyum Aurangzeb, Finance Minister Miftah Ismail said on Saturday that Pakistan would receive $6.5 billion from multilateral sources in the financial year. In progress. He further said that $3.5 billion is expected from the Asian Development Bank (AfDB), $2.5 billion from the World Bank, $500 million from the Asian Investment Bank in infrastructure and part of the Islamic Development Bank in the current fiscal year after the agreement with the IMF.
He informed the media that the government is also expecting $4 billion in financial aid and postponing payment facilities from friendly countries. Without naming the countries, Miftah Ismail said a friendly country would provide a $1.2 billion deferred oil payment facility to Pakistan. Meanwhile, another country would invest $1.5 billion to $2 billion in cash deposit. Similarly, a friendly country would supply gas on Pakistan’s Oil Deferred Payment Facility.
He reiterated to bring economic stability and overcome the power shortage next summer. The government would reduce the inflation rate from the current 20%. During this time, the government would also build up foreign exchange reserves. He clarified that the government would not announce any mini budgets in the current financial year to achieve its targets.
The finance minister said the coalition government saved the country from default by taking tough decisions and put it on the path to economic stability. Sharing the poor economic performance of the previous PTI government, he said the previous regime had increased the country’s debt by 80% to 45 trillion rupees, about 25 trillion rupees in 2018. Meanwhile, he had recorded four record budget deficits. The average annual budget deficit over the last four years of the PTI government was 3.6 trillion rupees compared to an average deficit of 1.6 trillion rupees during PML-N’s tenure. The trade deficit also reached a record high of $48 billion and the current account deficit at $17 billion, the minister added.
Despite massive lending, averaging 5 trillion rupees a year; the PTI government had not completed any mega-projects in the power, railway, road or health sectors. On the other hand, Miftah claimed that the PML-N government has taken an average loan of Rs 2120 billion per year and completed mega projects in the country including power, infrastructure and other projects.
He informed that the PTI government had promised with the IMF to impose a petroleum tax of Rs30 and a general sales tax of 17% on petroleum products, which should have raised prices by Rs75 per litre. However, the current government has only imposed a tax of Rs 10 per liter on petrol and Rs 5 per liter on diesel. Later, after the motion of no confidence, the PTI government broke the agreement with the IMF, which led to the cessation of loans from the Fund, the AfDB and the World Bank at a time when the country needed support. funding of $21 billion to repay previous loans and $9 billion to hold currencies. higher reserves. He criticized the previous government for announcing a tax amnesty program for industrialists at a time when the country needed revenue.
The Minister of Finance has pledged to meet the tax collection target as well as the non-tax collection in the current fiscal year. He added that the government would reduce the budget deficit by 1 trillion rupees in the current financial year despite increasing the share of the provinces in the divisible pool, improving the development budget and granting grants to Utility Stores Corporation (USC). The government also increased salaries and pensions in the budget. He said the government would reduce oil prices whenever they drop in the international market.
Miftah Ismail said the pressure on the local currency will ease after July as imports are expected to decline. He said the currency appreciated against the euro, the pound and the yen. However, it only depreciated against the US dollar.
He added that the government would protect the poor segment of society from rising electricity and gas tariffs.
The finance minister said that Pakistan Railways and Pakistan International Airline announced the reduction of their fairs after the drop in oil prices. Provincial governments have also been instructed to take action to lower long-distance and intra-city rates to facilitate passengers.
Meanwhile, the World Bank’s Board of Directors has approved $200 million for Pakistan to transform the agricultural sector by adopting climate-smart technologies to improve water use efficiency, boost resilience to extreme weather events and increase the incomes of small-scale farmers.
Punjab’s agricultural sector is central to Pakistan’s economy and food security, as it accounts for 73% of the country’s total food production. The Punjab Resilient and Inclusive Agriculture Transformation (PRIAT) project will increase agricultural productivity through efficient and equitable access to water for smallholders. It will support farmers at the community and household level to adopt climate-smart agricultural practices and technologies that improve crop yields and conserve water resources in Punjab.
“In recent years, Pakistan’s agricultural sector has suffered from crop and livestock yield losses, damage to irrigation infrastructure and food shortages due to climate change, particularly severe droughts in Punjab province,” said Najy Benhassine, World Bank country director for Pakistan. “This project aligns with the Punjab Agriculture Policy 2018, which promotes a massive expansion of water conservation efforts, building sustainability and resilience to climate change, and private sector involvement to help boost the industry productivity.
PRIAT will help farmers implement innovative and climate-smart technologies to help the government of Punjab achieve economies of scale to transform the agricultural sector.
“The agriculture sector has a huge opportunity to both build climate resilience and improve economic conditions by generating access to domestic and international markets,” said Guo Li, project team leader. “PRIAT will help accelerate government efforts to transform the agrifood system through market-driven production activities that add value, increase competitiveness and generate higher incomes for farmers.
The project will benefit approximately 190,000 small family farms and 1.4 million acres of irrigated land in rural communities across the province.