Home »Stocks and Bonds » Pakistan » Rs 750-800 billion PSDP likely: Hafeez explains criticality of IMF bailout
Advisor to Prime Minister on Finance Dr Hafeez Shaikh has said that the government is likely to allocate Rs 750-800 billion under Public Sector Development Programme (PSPD) in the upcoming budget for 2019-20. Addressing a press conference here at Federal Board of Revenue (FBR) House on Tuesday, the advisor said that the government is likely to unveil the budget for 2019-20 on June 10 or 11. He said that PSDP is currently Rs 550-600 billion. The government is likely to allocate Rs 700-800 billion for the PSDP in the upcoming budget for projects of national interest.

He further said that the government is almost doubling the budget of Benazir Income Support Programme (BISP) and Ehsas programme. Instead of Rs 100 billion, it will be Rs 180 billion.

He said that the IMF programme is in favour of Pakistan. "Those who are opposing the IMF programme are the ones who had already done the same," he added.

He said that actions such as reducing the gap between imports and exports, reducing losses of state-owned entities and curtailing expenditure are in favour of the country.

He said, "Pakistan has been going to the IMF again and again because it failed to increase its exports, foreigners remained reluctant to invest in the country, large state institutions remained loss-making and revenue mobilisation was not done [effectively]."

Shaikh then went on to talk about the Pakistan-IMF negotiations that continued for a month. He said that a staff level agreement has been reached. After this the IMF board will ratify the agreement. This is necessary for Pakistan, he said, given how things are going. He said that the goal is to reduce the trade gap and debt burden which is in Pakistan's favour.

Dr Shaikh said that some people are fearful that inflation might go up. He said that some people are apprehensive that electricity tariff will be increased under the IMF accord. He clarified if that is done, those who consume less than 300 units will not be affected.

"We have taken steps to make it easy for people. For example, if electricity prices go up, it won't affect users consuming less than 300 units and the government has allocated Rs 216 billion in the budget. Seventy-five percent of consumers will benefit from this." He further said if gas prices soar, they have taken steps to save 40% of low-end users.

"It is true that our revenue collection has been below expectation," Shaikh said. "We are taking decisions to improve it. These steps, with the new FBR chairman and the government's resolve, will be reflected in the budget. For this you'll have to wait for a few weeks."

Copyright Business Recorder, 2019

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