Finance Minister Shaukat Tarin said on Wednesday that Pakistan could not abandon the IMF program. He said this during a meeting of the Senate Standing Committee on Finance chaired by Senator Talha Mahmood to discuss the Finance Bill for 2021.

He said he disagreed with the IMF’s call for an increase in personal income tax to raise another Rs. 150 billion in the next fiscal year, and made it clear that this would burden the already paying taxpayers and the poor, hence Government would explore further ways to raise its Tax Collection.

Tarin said he will seek one or two percent of fiscal space from the International Monetary Fund to increase spending on health and education.

The minister explained that the $ 29 billion deficit left the government no choice but to join the International Monetary Fund and accept its difficult terms by raising the discount rate, lowering the exchange rate and raising electricity and gas tariffs.

“We turned to the IMF because the country did not have dollars to pay off previous loans,” he said, adding that the previous government borrowed $ 10 billion in the short term.

The minister said that Pakistan is still unable to withdraw from the IMF program.

Tarin said the economic chaos was already there when the current government came to power with huge current account deficits and an overheated economy.

As a result of measures taken by the International Monetary Fund to tackle the problem of overheating in the economy, growth has slowed down to Covid-19.

However, he added that Prime Minister Imran Khan’s prudent policy has bolstered the economy and the poor.

He added that the current account deficit is currently in surplus for several months, the budget deficit is limited, and the stimulus package provided to the industry during Covid-19 has started to show positive results in the industrial sector (mass production) and exports.

The minister said the strategy is now to move forward towards inclusive, sustainable and long-term growth to create jobs for people, and spending on the public sector development program – Rs 900 billion set aside for the next fiscal year – will help stimulate growth in country. …

The finance minister said he could not say if growth will be sustainable or not, because it will only be in three to four years whether the country is moving towards sustainable growth or not.

However, the only thing the committee can guarantee is that the actions taken in the budget will ensure inclusive growth, as a bottom-up approach will be adopted for the first time.

He said that his first priority was to increase yields and then increase productivity in agriculture and industry, as well as in the export of textiles and information.

He added that the investment will attract the Sino-Pakistani economic corridor, while the construction industry will focus on job creation.

Tarin called the energy sector a major problem for the economy and the government will address the issue of energy payments, as well as improve the efficiency of the distribution companies that privatize them.

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