The IMF expresses concern over a Rs 61 billion increase in Pakistan’s circular debt, potentially impacting provincial finances.
Islamabad: (RightNow) The federal government has informed the IMF that Rs 110 billion in electricity dues from provinces will be deducted from the NFC Award. However, the IMF has expressed concerns over the potential impact of this move on provincial finances.
According to sources, detailed discussions with the IMF focused on the circular debt in the power sector and provincial liabilities. The Power Division reported that the circular debt increased by Rs 61 billion last fiscal year, reaching a total of Rs 1.675 trillion.
The IMF fears that the deduction of electricity dues could affect the financial condition of the provinces. The government stated that reconciliation of Rs 110 billion from provinces is complete, with plans to recover Rs 50 billion soon.
It is important to note that in the past, provincial governments opposed attempts to deduct electricity dues from the NFC share. The IMF has also raised questions about the uniform electricity tariff policy.
The IMF has opposed subsidies on fuel in Pakistan, suggesting targeted subsidies instead. Negotiations are ongoing regarding petrol prices and gas company liabilities.
