The Finance Ministry has reportedly decided to slash the Public SectorDevelopment Program (PSDP) by almost 50 percent to Rs. 350 billion forsecuring the IMF Loan Program.
Finance Ministry has reportedly decided to reduce PSDP funds to Rs. 350billion from Rs. 728 billion for the current fiscal year to save the IMFloan program.
The government wants to divert more and more resources to start thereconstruction and rehabilitation process in the flood-affected areaswithout increasing the burden on budget deficit due to IMF pressure,sources further told the scribe.
IMF wants that Pakistan’s government must control the budget deficit at theagreed level, amid, the flood relief activities in the affected areas ofthe country. The Finance Ministry has decided to a massive cut in theproposed PSDP for the current fiscal year.
The Finance Ministry will present this proposal before Prime Minister forgetting final approval very soon, they said and Prime Minister will take adecision keeping in view the prevailing economic condition of the country.
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The basic aim of the federal government to slash the PSDP is to reduce thebudget deficit which is swelling due to heavy spending on flood-relatedactivities and heavy payment of debt serving on public debt andliabilities, they further said. Pakistan government has provided funds toflood affectee’s families from the budget so far.
Sources also said that the IMF is insisting on Pakistani authorities toprovide details of the expenditures of the current fiscal year which hasbeen done so far including the flood-related expenditures. They said thatthe Fund believes that the Pakistan government will miss the targets of theestimated primary budget surplus and provision of surplus budget fromprovinces during the current fiscal year due to heavy spending onflood-related expenditures.
They said that the Q Block headed by Finance Minister Ishaq Dar is tryingto convince the International Monetary Fund (IMF) to start the ninth Reviewmeeting which was scheduled in the last week of Oct 2022 by takingdifferent steps to fulfill the obligations of IMF. The government wasexpecting that the talks between Pakistan and IMF will be started in thelast week of November but still, they could not kick off the ninth review.
