The caretaker government has taken a major decision to reduce the budget deficit due to the strict condition of the International Monetary Fund (IMF) to reduce the government expenditure.
Sources say that the federal government wants a significant reduction in expenditure before the negotiations with the IMF in November. Under the IMF loan program, the provinces have to show a surplus of 600 billion rupees this fiscal year. Pakistan will get another 700 million dollars only if recommended.
According to the sources, it has been decided not to start new projects of the development program of the current financial year and to meet the financial requirements of the ongoing development projects only.
According to Finance Ministry sources, this decision has been taken considering the difficult financial situation of the country, the Special Investment Facilitation Council has also supported the proposal.
According to the sources, it has been decided to participate in the subsidy of electricity, gas, wheat and fertilizer from the provinces in proportion to the population.
Sources say that wheat and urea fertilizer were imported at the behest of the provincial governments, the trading corporation’s obligation to import commodities is more than 2 thousand billion rupees, the provincial governments have not paid their share for the past several years.
According to sources, work is on on the law for participation of provinces in development projects and all subsidies, if necessary, the finance ministry will recommend changes in the National Finance Commission award.
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