The International Monetary Fund (IMF) has rejected Pakistan's government proposal aimed at alleviating the burden of exorbitant electricity bills for the impoverished, according to sources in the Finance Department. The proposal failed to reach a consensus with the IMF, primarily due to differing estimates of its impact. While the Pakistan government projected the relief plan's impact at less than Rs6.5 billion, the IMF assessed it at approximately Rs15 billion, leading to its dismissal.
The IMF has now requested a proposal from Pakistan detailing how it intends to cover this fiscal gap of Rs.15 billion. Once the new plan is shared with the global lender, discussions between the Finance Ministry and IMF authorities will resume.
Pakistan has assured the IMF that providing relief for inflated power bills will not result in a budget deficit. The proposed plan sought to allow consumers to pay their electricity bills in installments over four months, with a reduction of Rs3000 for users consuming 300 units.
Despite the rejection, Pakistan remains committed to honoring the IMF program, as stated by Caretaker Minister for Finance Dr. Shamshad Akhtar. The IMF may be open to collecting the August and September bills in installments but is unlikely to agree to reducing taxes imposed through electricity bills.
