ISLAMABAD: Secretary Finance Rana Abdul Wajid has said that Pakistan is not going to seek another IMF loan and the government also does not agree to the Fund's concern about fiscal framework of Pakistan based on assumption. Briefing the Senate Standing Committee on Finance on the IMF Executive Board meeting, Secretary Finance said Pakistan is neither going for a new programme nor any shadow programme is under implementation.
He said the IMF projections about grave challenges to the fiscal framework were based on assumptions that external inflows budgeted on various accounts would not materialise. The government projections about the budget are also based on assumption that external resources as well as budget surplus by provinces would materialise and the fiscal deficit would not escalate as high as being forecast by the IMF and others.
Wajid Rana neither dispelled nor agreed regarding concerns, similar to the IMF, expressed by the members of the committee about the economic situation of the country. At one point, the chairman of the committee, Ahmed Ali as well as majority of members regretted that the Finance Ministry has been ignoring all their suggestions and was taking the decisions as it may please. "Our job is to keep telling you that the economic situation in the country is not as good as being presented by the Finance Ministry..." rather it is very grave.
Committee members Safdar Abbasi, Ishaq Dar and Professor Khurshid said that there are least chances of materialisation of the inflows budgeted by the government on external account to achieve the target of 4.7 per cent fiscal deficit, which the IMF and independent observers believe would be difficult to contain even at 7 percent. Safdar Abbasi said the government borrowing from the scheduled banks due to non-materialisation of the external resources has been adding additional pressure on the commercial banks. He said that nothing would be left with the banks for private sector, after Rs 1400 billion borrowing by the government to bridge the yawning fiscal deficit. Ishaq Dar said there is no hope for materialisation of external inflows of $800 million budgeted on account of Etisalat as long as the government does not resolve the issue of grey trafficking.
Wajid Rana said the government is expected to get budgeted inflows on account of Coalition Support Fund (CSF) as a lot of positive developments on the issue have recently taken place. He said there were some positive indicators in the last meeting of the federal and provincial finance ministers that the provincial governments would be able to give budget surplus. He said the post programme monitoring (PPM) by the IMF on Pakistan economic indicators is due in May 2012. The IMF concern was about the government failure to eliminate subsidies in power sector, commodity operation as well as lack of effective supervisory framework on fiscal and monetary sides.