Pakistan proposes Rs300 billion cut in govt expenditures to IMF

Pakistan has presented a comprehensive plan to the International Monetary Fund (IMF) aimed at reducing government expenditures by Rs300 billion in the next fiscal year, including a stringent ban on development schemes. 

According to sources cited by ARY News, this cost-cutting strategy includes several significant measures. One of the key components is the cessation of establishing new universities by the federal government, with provincial governments expected to bear the responsibility of funding existing universities under their jurisdiction.

Additionally, a new contributory pension scheme will be introduced for all government departments, excluding defence and police personnel. This move aligns with the IMF’s recommendation for Pakistan to overhaul its pension system.

The sources also mentioned the possibility of a complete ban on development schemes funded by parliamentarians in the next fiscal year. Moreover, the federal government will cease funding ongoing projects that are in cooperation with provincial governments.

Another notable measure under consideration is the elimination of positions from grade 1 to 16 that have been vacant for over a year, further contributing to the reduction in government expenditure.

The IMF has urged Pakistani authorities to impose taxes on monthly pensions exceeding Rs100,000 as part of the stringent economic reforms required for the new loan programme. The proposed reforms also include legislation aimed at taxing wealthy pensioners to secure the financial aid.

These proposed measures are a part of Pakistan’s efforts to meet the IMF’s demands and secure the much-needed financial support to stabilise its economy.