IMF concerned over no increase in power tariff: Waqar Masood

ISLAMABAD: Dr Waqar Masood Khan, Special Assistant to Prime Minister on Finance and Revenue, Friday said that the IMF had some reservations about not increasing the electricity tariff, and new sources of generating taxes.

Speaking in Geo News programme ‘Aaj Shahzeb Khanzada Key Saath’, he said that the IMF wanted the PTI government to implement the already agreed upon measures. However, the Fund was told that the real focus should be on target, instead of any fixation over the way leading to that target.

“We would have convinced the IMF had we enough time before presentation of the budget,” Dr Waqar said. Perhaps, the Fund was not fully aware of the fact that how the PSO could help meet the tax collection targets, he added.

Dr Waqar Masood said it was decided that power tariff would be increased by Rs4 per unit. The electricity rates had already been hiked by Rs1.95 per unit, and the Fund was asked for delaying another increase of Rs1.90 per unit as it would burden the power consumers beyond their capacity. He said power tariff had already been hiked by 40 percent under the IMF programme. “But our argument is that increasing electricity rates again and again is no solution to restoration of the energy sector,” he said.

The PM’s special assistant said the government had given an assurance to the IMF about no increase in circular debt. He said talks would continue with the IMF, and there had been a short break in it for the moment. He said the Fund officials were focussed on a board meeting on July 6-7, while the finance authorities in the country were busy in preparation of the budget for financial year 2021-22.

“Had we sufficient time, we would have reached some conclusion,” Dr Waqar Masood said, adding that the IMF was a difficult and hard programme, and the government had to make hard decisions. He said Pakistan would have financial figures for July and August when the next meeting would take place with the Fund authorities. He said Pakistan was the country which made the most fiscal adjustment with the IMF during the COVID-19 pandemic.

The special assistant said that the federal government was transferring Rs700 billion more funds to provinces this year. He said the finance minister had removed hitches in privatisation of LNG-based power projects, and now privatisation would be carried out in such a manner that the ownership rights of the privatised units would stay with a government department, and the money generated would reach the exchequer as the non-tax revenue.