If Pakistan goes for a new programme from the International Monetary Fund (IMF), it would be based on the policies of the Pakistani authorities and designed by the Fund in close collaboration with them. Well-placed sources told Business Recorder here on Wednesday that Pakistan, like any member country of the IMF, may request an IMF programme at any time.
"Whether the next programme would be more rigid or not, is totally premature to discuss," sources maintained. Sources added that "the Fund team was to visit Pakistan in July for the Fifth Review under the Stand-By Arrangement but the failure of the economic managers to meet the revenue targets became the main reason behind the increased fiscal deficit which, in turn, made the Fund revisit its plan to visit Pakistan in order to restore the stalled programme worth $3.2 billion."
"The IMF has requested the government to provide actual figures of expenditure and revenue collected during 2010-11 in order to schedule post-budget review talks as slippages in targets have become the norm," sources lamented. Dates of the IMF visit are not finalised so far but it is now expected that the mission may visit the country in September and if Pakistan fails to convince the Fund, it is unlikely that the stalled SBA would be reactivated. This may compel the government to request another programme of $3.2-5 billion.
The net revenue collection of the Federal Board of Revenue has shown a shortfall of Rs 38 billion or a total of Rs 1550 billion for 2010-11 against the annual target of Rs 1588 billion. Failure to achieve the targeted revenue collection impacted on the fiscal deficit to the tune of 0.2 percent. The shortfall of Coalition Support Fund (CSF) is expected to have 0.3 percent impact on fiscal deficit. The failure by the government to control expenditure is estimated to have an impact of 0.1 percent on the fiscal deficit. Thus, the fiscal deficit is expected to be 5.9 percent for 2010-11 against the target of 5.5 percent.