IMF briefing to standing panels: MPs say no to mini-budget

ISLAMABAD: The visiting IMF mission has asked Pakistan to open up the economy by removing restrictions through the liberalization of imports and the creation of fiscal space for achieving Sustainable Development Goals (SDGs).

It was the crux of the discussions held among the visiting IMF team and the joint parliamentary committee of the National Assembly and Senate Standing Committees on Finance and Revenues here at the Parliament House on Wednesday.

The IMF suggested broadening of the narrow tax base to bring new potential non-filers into the tax net, harmonization of GST on both goods and services, removing restrictions through liberalization of tariff regime and creation of fiscal space for achieving the SDG targets. The parliamentarians belonging to both Lower and Upper House of Parliament strongly opposed the IMF conditions that had plunged the economy into stagflation resulting in rising unemployment and poverty.

National Assembly Standing Committee on Finance Chairman Faizullah told the media after the meeting that the IMF team made a presentation on various important aspects of the economy and stressed upon the need to create fiscal space for achieving the SDGs. While answering a question regarding mini-budget, he replied that there would be no mini-budget and whatever measures were required would be taken in the next budget for 2020-21. Senate Standing Committee on Finance Chairman Senator Farooq H Naek told media that nothing specific about mini-budget had come under discussion however the IMF team gave a presentation about SDGs, Free Trade Agreements (FTAs), trade liberalisation and Sales Tax related issues.

Another parliamentarian said that Pakistan would require over Rs6.2 trillion for achieving the SDGs in 10 years. Aisha Ghaus Pasha, MNA from PML-N said that the IMF team briefed the committee about three issues including how growth could be increased through trade, funds required for the SDGs and harmonisation of the GST. Pasha pointed out that none of these were happening under the IMF’s Extended Fund Facility (EFF), which would continue for three years. Instead, she said that the members apprised the IMF that the country was heading towards stagflation as the GDP growth was not picking up while inflationary pressures were squeezing the people. Aisha Ghous Pasha said that the members expressed their reservations over inflation, poverty and other issues in the economy, but there was no assurance from the IMF.

Senator Sherry Rehman said that Pakistan’s economy was in dire straits because of lack of investments. She said that there were frequent changes at the top level of the FBR and the finance ministry. The SDGs, she said, was underfunded as the utilization of funds was also creating difficulties for achieving the desired results.