An increase in the price of electricity in Pakistan by around 1300 billion rupees is inevitable according to IMF estimates
The government of Pakistan should increase revenue and cover the losses of the power sector or shift the burden to the public
IMF has approved new conditions for the second final review of the loan program $3 billion standby arrangement for Pakistan.
ISLAMABAD ( Web News )
The International Monetary Fund (IMF) has estimated that to make the balance sheet of the lifeline power sector of Pakistan’s economy transparent, an increase in the price of electricity by around 1300 billion rupees is inevitable, either the government The macroeconomic and financial policies agreed between Pakistan and the IMF should be increased in a phased manner to increase revenue and cover the losses of the power sector or to shift the burden to the public. According to the document, the circular debt of Pakistan’s power sector has reached 2500 billion rupees, despite this circular debt was 500 billion rupees in 2013-2013, which has increased to 2500 billion rupees by the beginning of 2024. including payment of electricity price and circular debt amount parked in Power Holding Private Limited. Its value has reached 200 billion rupees and the government has to increase the electricity rate to recover the amount of 200 billion rupees from the consumers or increase the revenue to cover the decrease in the income of the electricity companies. This burden is still being transferred to the people in the context of quarterly electricity price revision and monthly production cost increase. 100 billion rupees have not been paid, either the government should provide the subsidy amount to the electricity companies or the burden should be transferred to the people by increasing the price of electricity. The loss of the power sector due to non-receipt is also worth 300 billion rupees, as every year it has to make a basis for the increase in the price of electricity. In order to make the balance sheet fully transparent, an additional burden of Rs.400 billion will have to be put on the public or the government will have to meet these other power tariff adjustments by increasing its revenues to bring the power sector out of the financial crisis completely.
The Executive Board of the International Monetary Fund (IMF) has approved new conditions for the second final review of the loan program to be held on March 15 under the existing $3 billion standby arrangement for Pakistan. As a result of policy-level discussions between Pakistan and the IMF under the Memorandum of Macroeconomic Policies and Framework agreed by the Government of Pakistan with the FK Executive Board, the new conditions that have come to light include Pakistan’s every The gas prices will have to be revised twice a year in the light of the increase in the production cost. If the production cost of gas will be reduced, then the price of gas will have to be reduced accordingly. In this regard, the notification of the first tariff adjustment on gas prices will have to be issued by February 15. After the completion of the first phase of electricity base tariff revision on July 1, the power tariff rebasing process will be made permanent after the completion of the first phase of electricity base tariff revision to cover the electricity theft losses, their transmission and distribution losses, interest on the loans taken for the power companies. Along with this, the series of monthly tariff adjustments on the price of electricity based on the production cost of electricity must be continued. In order to control Pakistan’s domestic and foreign borrowing, Pakistan must create a new collateral policy and a new counter part policy. Control and its use has to be made effective. Pakistan has to make a new policy under the new law of State Owned Enterprises approved by the Parliament, according to which the SOEs held by the government have to be run under a full corporate culture. Privatization, handing them over to provinces, closing them or giving them autonomy should be the final decision. At the end, in the light of the decrease in the gross national product, the meeting of the National Accounts Committee will have to be convened to determine the GDP and its report will have to be sent to the IMF to save the banks in Pakistan from sinking. In the light of the recommendations of the internationally recognized IMF for the intervention, solutions to their problems, solutions to the crises that may arise in them, the draft for the approval of the new law is approved by the parliament formed as a result of the future elected government. Under the Benazir Income Support Program and other social welfare programs in Pakistan, their assistance must be increased according to inflation. will not be given the facility of concessional tax rate.Tax policy must be kept the same for all.To discourage imports, Pakistan should completely remove the restrictions imposed on the issuance of foreign exchange in December 2022 and adjust the value of foreign exchange according to the supply and demand in the market. It has to be done and the difference in the value of the Pakistani rupee against the dollar in the inter-bank and open market should be kept at 1.25% or less. Must be imported. According to Naji TV, according to the report issued by the International Monetary Fund (IMF), Pakistan has assured to impose sales tax, advance income tax, withholding tax and federal excise duty in several sectors. According to Pakistan, the IMF has been told that they will not increase the pensions and salaries of government employees this fiscal year, thus improving the priorities in the federal development budget and saving 61 billion rupees. Will fulfill the promise not to.