No more subsidies, Shamshad responds to masses relief calls

Finance minister says IMF program is non-negotiable as caretaker govt has inherited it from previous govt n Warns dollar value could further increase if govt stops implementing IMF programme.

ISLAMABAD  -  Caretaker Finance Minister Sham­shad Akhtar on Wednesday made it clear that the government does not have any fiscal space to provide sub­sidies to the masses as the country’s economic situation is worse than an­ticipated.

The minister said that every con­ceivable effort had been directed to­wards undermining the economy. “Unfortunately, no effort has been spared to destroy the economy,” she remarked during the Senate Stand­ing Committee on Finance and Rev­enue and talking to the media later here. She further said that the care­taker government had “inherited” the International Monetary Fund (IMF) programme; hence, it was “non-negotiable”.

The finance minister’s statement comes as Pakistan remains plagued by the inflated cost of living, partic­ularly exorbitant electricity prices that have forced residents to take to the streets across the country. So far, the caretaker government has failed to come up with any relief measures as it tries to strike a balance between avoiding drawing the IMF’s ire and causing more citizens to blow a fuse. Talking about the ongoing currency de­preciation, the minister informed that this was due to the higher out­flows of dollars against the low inflows. She ex­plained that Pakistan’s 70 percent tax revenue is be­ing spent only on debt ser­vicing. Earlier, the Sen­ate Standing Committee on Finance in its meeting expressed concerns over the continuous currency depreciation against the US dollar. Pakistan rupee continues shattering re­cords as it reached a new low against the US dollar during early trading on Wednesday, with the offi­cial exchange climbing to Rs304. She warned that dollar value could fur­ther increase and the eco­nomic situation would worsen if the government stops implementing the IMF’s programme. Sham­shad Akhtar informed the parliamentary commit­tee that there is a need to privatize the loss-making public sector entities at the earliest as their losses are unbearable. “The next elected government would have to re-engage with in­dependent power produc­ers,” Akhtar stated and added that the country’s tax collection is much low­er than the expenditures. She clarified that the in­terim government does not have unlimited pow­ers. “We have limited op­tions and will work with­in them”. The previous government had agreed on “adjustments” with the IMF and the incumbent set-up could not do any­thing in this regard. She said that the proposal to withdraw facilities for the privileged class was under consideration and a brief­ing would be given to the committee on the econo­my after a week. She said that the government is aware of the plight of the country’s poor population and that further burden­ing the underprivileged segment of society is not an option. She pointed out that the subsidies includ­ed in the IMF agreements were already established by previous governments, and there is no room for further subsidies in these agreements. The minis­ter went on to say that the government is planning for economic stability and is working on practical measures to improve the economy. She stated that actions were being taken to strengthen the econo­my in such a way that the exchange rate of the Paki­stani rupee remains sta­ble against the US dollar, as part of efforts to bolster economic stability.

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