Muzaffar Hussain Khan Magassi Chief of Seraiki Inqilabi Council (SIC) has said that development budget would be cut down by 50 per cent (Rs 256 billion) and Rs 100 billion additional taxes are soon to be imposed through fiscal and administrative measures.
Besides reducing the deficit financing of the budget from 7.4 per cent currently to 3.4 percent over the stipulated loan-program period (2008-12), and the repayment period (2012-15) as per IMF conditions.
Talking to newsmen here after All Parties Seraiki Conference here on Sunday, he said transport toll would be increased four times for the commercial and non-commercial vehicles in 2009-11, while the energy rates would be increased by more than 30 per cent over this period.
Electricity prices would be increased at least by 32 per cent, gas by 39 and petroleum prices (aggregate) by 15 per cent. Likewise, medicine prices would also be increased as the payable income tax would fiscally and administratively be increased on the pharmaceutical companies by at least 100 per cent. They are not facing the GST implementation presently, but "that too would be imposed in the process."
He said that IMF has neither agreed to provide soft loan, nor it relaxed its conditionalities and its deal will bring the consumers, subscribers and provincial governments on a collision course after its hidden conditions will be revealed, said Muzaffar Hussain Khan Magassi.
He said that controversy about the interest rate is still unresolved. The standby facility being offered is said to be the highest ever on a soft-loan mark-up of 3.51 to 4.51 per cent agreed to by any country for foreign currency bailout.
Muzaffar Khan said Pakistan has never obtained structural adjustment facility loan or balance of payment assistance on mark-up rates higher than 3 per cent. Bangladesh had obtained a $490 million concessionary credit under a three-year standby loan at 2.9 per cent which was discounted later on to make suitable adjustments. All other developing countries have obtained such loans at three or below three per cent mark-up rates, mostly applying for discount which was granted in most cases. He further said that other conditions attached to this loan were worrisome.
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