Govt presents plan to IMF for alleviating electricity bill burden

ISLAMABAD: Government authorities have disclosed their strategy to the International Monetary Fund (IMF) with the aim of easing the burden of steep electricity bills on the nation.

Despite this initiative, the Fund has been assured that the predefined targets set by the previous administration will remain intact, according to a report by The News.

Caretaker Finance Minister Dr. Shamshad Akhtar stated on Wednesday that a delegation of Pakistani authorities engaged in discussions with IMF officials. Although not directly participating in these talks, Dr. Akhtar reiterated Pakistan’s unwavering commitment to upholding the IMF program.

Confidential sources within the finance ministry have indicated that the emergency allocation of Rs250 billion, as outlined in the 2023-24 budget under the IMF program, could potentially be utilized to provide relief to electricity consumers. However, securing IMF’s approval for the proposed relief package might necessitate further deliberations and could potentially be limited to consumers using up to 400 units.

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Responding to inquiries, a senior official involved in negotiations with the IMF underscored their dedication to achieving the IMF’s projected objectives, which encompass power subsidies, the designated target for reducing circular debt, and a primary surplus amounting to 0.4% of the GDP for the ongoing fiscal year.

The official acknowledged that the proposed relief plan had not yet been formally submitted in writing to the IMF. Economic experts speculate that this absence of documented proposal might further postpone the implementation of the intended relief package for electricity consumers.

Presently, Pakistan is grappling with severe inflation largely driven by surging electricity bills. This predicament has led to nationwide protests spanning the past five days, during which citizens have publicly burned bills and declined payment. Responding to the mounting unrest, the interim government convened an emergency meeting. However, a swift solution to offer immediate relief remains elusive, prompting the government to seek IMF approval before finalizing any proposed measures.

Headquartered in Washington, the IMF has urged Pakistan to furnish a written plan outlining the proposed measures aimed at mitigating distress stemming from electricity bills.