Finance Minister Dr Miftah Ismail Saturday said the government has no intention to approach the International Monetary Fund (IMF) for another programme loan as economic measures, taken since December 2017, including rupee depreciation, have started delivering. Addressing a post-budget news conference flanked by Prime Minister's Advisor on Revenue, Senator Haroon Akhtar Khan here, Miftah said measures taken by the government since December last year, including changes in the currency market, will help avoid seeking another bailout package.
"We will avoid approaching IMF for another program," he said, adding that his firm belief was that foreign exchange reserves will increase by 30th June, 2018 and the government has secured one billion dollars financing today.
Haroon Akhtar said the government took economic measures to contain fiscal deficit. The measures include export package, imposition of Regulatory Duty (RD) on luxury items and depreciating the rupee twice, which have delivered and if these measures continue to deliver there would be no need for another IMF program.
Responding to a query on energy sector circular debt, the Finance Minister said the incumbent government has added 12,000MW electricity to the system. With increase in power generation, electricity supply has also increased due to which the volume of circular debt moved up.
He said recently, the government released Rs 80 billion, and another Rs 100 billion was approved by the ECC for the energy sector and subsequent to these disbursements the circular debt will be around Rs 350 billion, which according to the IMF, is within acceptable limits, which implies that it will not be an issue.
Akhtar also commented on the issue of circular debt, saying that it is being said that the incumbent government cleared circular debt of Rs 480 billion five years ago and that the circular debt has reached the same level, but the volume of subsidy was around Rs 200-250 billion during the PPP government while the incumbent has curtailed at Rs 125 billion due to which fiscal debt has been contained.
He said efforts are being made to bring more people into the tax net and salaries of government employees have been enhanced in the new budget. Replying to another question, the Finance Minister said that the government has increased salary by 10 percent as ad hoc relief and house rent has been raised to 50 per cent.
However, on a question regarding increase in minimum wage, he said that it is a provincial subject. Miftah Ismail refused to reply to a question regarding payment of Rs 4.5 billion to Director General ISI for 'a special assignment', saying "I will not reply to the question on intelligence agencies." Haroon Akhtar Khan added that this issue is not discussed in any country.
He said, water is a serious issue and for this purpose Rs 25 billion have been earmarked for a desalination plant. Replying to a question about his intent to contest the forthcoming elections from Karachi, he said the Prime Minister wants me to contest from NA 242 and 243.
On a question that most of the new projects approved in the PSDP are in Punjab and small provinces ignored, the minister said that the budget will be approved by Parliament and that the NEC has no such power. The Finance Minister was asked whether he could state with certainty that the fiscal deficit would not touch 6 percent of GDP in the current year, he responded in the negative.
He acknowledged that fiscal and current account deficits are issues facing Pakistan but added that people completely ignore that both are inter-linked. He added that the government has endeavored to contain fiscal deficit at 5.5 percent in contrast to PPP government's achievement of 8.2 percent and next year's target of 4.9 percent will be achieved. He said when fiscal deficit target will be achieved the current account deficit will also shrink.
Replying to a question about no revenue from privatization in 2018-19, he said that if the next government privatizes loss-making Public Sector Entities (PSEs), it would increase government revenue.
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