Govt reviews FY24 budget as last ditch effort to clinch IMF deal
On Saturday, Finance Minister Ishaq Dar said the federal government has introduced a number of changes to its fiscal year 2024 budget in a last-ditch effort to clinch a stalled rescue package with the International Monetary Fund (IMF).
“Pakistan and IMF had detailed negotiations as a last effort to complete the pending review,” he said while addressing the National Assembly.
For the fiscal year starting next month, the federal government will raise a further Rs215 billion in new tax and cut Rs85bn in spending, as well as a number of other measures to shrink the fiscal deficit, he said.
Dar said that for the past few months, the nation was questioning whether the IMF’s ninth review would be successful or not, adding that he wanted to take the people into confidence on the matter.
He said the government had completed all prior actions and achieved compliance on the Fund’s demand but Pakistan’s case could not be put in front of it due to the external financing gap.
Dar said that it was decided between Pakistan and the IMF for a “last final push” to move the review forward, following which detailed negotiations were held with an IMF delegation in the last three days to complete the ninth review.
The finance minister said the suggestion for Rs215bn in new taxes came about as a result of the talks, adding that care was taken that the tax burden would not fall on the poor and weak segments.
He further said the Rs85bn spending cut would also be achieved without any curtailment in the federal development budget or the salaries and pensions of government employees.
Providing updated figures for the FY24 budget, Dar said the revenue collection target for the Federal Board of Revenue was increased to Rs9,415bn from Rs9,200bn. The share of the provinces would be increased to Rs5,399bn from Rs5,276bn.
The target for the federal government’s total expenditure was increased to Rs14,480bn from Rs14,460bn.
“Due to all of the above measures, there will be an improvement in the overall budget deficit,” Dar said.