The International Monetary Fund (IMF) has recently approved a bailout package amounting to $7 billion for Pakistan. Alongside this approval, a set of rigorous conditions tied to the loan program has come to light.
Sources indicate that Pakistan is obligated to adhere to the conditions set forth by the IMF under this financial arrangement.
One major stipulation from the IMF requires Pakistan to reassess the National Finance Commission (NFC) Award formula. Additionally, the IMF will oversee the expenditure of provincial governments to ensure compliance.
Among the stringent conditions outlined in the loan program is the directive that no relief will be granted on electricity prices, following the model set by the Punjab government. Furthermore, Pakistan is prohibited from issuing supplementary grants during the term of the IMF program.
Additionally, the sources reveal that Pakistan must incorporate the agricultural, property, and retail sectors into the tax framework, expanding the tax base.
The loan conditions also mandate the establishment of a new National Finance Agreement between the federal and provincial governments, which is currently under negotiation.
Moreover, the IMF has stipulated that Pakistan cannot provide energy sector subsidies exceeding one percent of GDP. The government is expected to implement reforms aimed at reducing electricity prices, and it will introduce a comprehensive package to facilitate this reduction. Lastly, the determination of minimum support prices for agricultural products will be halted, and there will be a restructuring of the federal government to streamline operations.