The PML-N government has announced to present the federal budget 2022-23 in the National Assembly on June 10, as it continues talks with the International Monetary Fund (IMF) in Doha, Qatar.
The Finance Division has asked the Cabinet Division to convene a budget meeting, approved by the prime minister, to consider the budgetary proposals.
According to Dawn News, “Sources said the government would be convening key meetings relating to the federal budget, starting with the Annual Plan Coordination Committee (APCC) in the first week of June to finalise about Rs700bn worth of development programme excluding allocations for provincial projects under 16 devolved ministries.”
“The meeting of the National Economic Council is being contemplated for June 7, followed by a special cabinet meeting on the budget on June 10.”
It added that during the talks with the IMF mission in Doha, it was discussed the fiscal framework for the next year could not afford more than Rs700bn. Otherwise, the burden of taxation would have to be increased.
During the meeting, the finance secretary told the government is committed to gradually eliminating fuel and electricity subsidies within 45 days to two months to avoid a sudden shock to the people under an agreed reduction plan.
On Monday, Finance Minister Miftah Ismail and Minister of State for Finance Dr. Aisha Ghaus Pasha would be joining the talks.
Dawn cited the sources as saying that “the first part of the subsidy reduction plan would come into force by next Monday next, particularly ahead of the conclusion of policy-level talks with the IMF on Wednesday.”
It said, “The two sides have generally agreed that the extension in time by one year and increase in the size of the programme by $2bn be linked to strategic structural benchmarks that address the root causes rather than delivering on fiscal targets.”
“It was thus agreed to set the privatisation of power companies and other loss-making state-owned enterprises as a structural benchmark in the revised and upgraded fund programme to $8bn so that circular debt flow is addressed forever and debt stock is dissolved through privatisation proceeds.”
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The import of luxury items has already been banned by the government, which will be followed up with subsidy reduction to contain fiscal deficits to secure an economic bailout from the IMF.
“Miftah has assured the fund to take tough decisions, undertake reforms committed in the original fund programme by the PTI government, and complete structural benchmarks. These steps were considered important to clear the backlog of structural benchmarks.”