The International Monetary Fund (IMF) has turned down Pakistan government’s proposal designed to provide relief to the impoverished for exorbitant electricity bills, sources in the Finance Department said Monday.
They said a consensus could not be achieved with the IMF over the relief plan.
In the proposal, the IMF was informed by the Pakistan government that relief provision would have an impact of less than Rs6.5 billion. The IMF, however, put the impact at about Rs15 billion, and dismissed the plan as a result.
The IMF has now reportedly sought a proposal on how Pakistan intends to cover this fiscal space of Rs.15 billion.
Once the new plan is shared with the global lender, the Finance Ministry and IMF authorities will head into talks again.
Pakistan has assured the IMF that providing relief for inflated power bills will not result in a budget deficit, sources added.
The IMF was requested to approve a plan seeking payment of electricity bills by consumers in installments over the course of four months.
The interim government devised a strategy to provide relief to power consumers on exorbitant electricity bills, with a reduction of Rs3000 for users consuming 300 units.
Reports suggest that bills for power consumers using 300 units in September will be decreased by the aforementioned amount.
The government, a few days ago, shared a plan with the IMF seeking relief for the impoverished people in connection with electricity bills.
The government held out an assurance that none of the targets agreed upon by the previous government would be compromised.
Caretaker Minister for Finance Dr Shamshad Akhtar said a team comprising Pakistani authorities met with IMF officials. While she was not part of the team, she reiterated Pakistan's commitment to honour the IMF programme.
Sources said the IMF would not agree with any reduction on taxes imposed through electricity bills, but it could agree on collecting the amount of the monthly bills for August and September in installments.