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Punjab expected to achieve Rs630 billion cash surplus

Ibraheem Sohail

Nov 19

Despite missing the International Monetary Fund’s (IMF) cash surplus by a staggering Rs182 billion, hope still remains for Punjab. 

 

Reports quoted provincial Information Minister Azma Bokhari as saying the IMF still believes that Punjab will be able to achieve the predetermined cash surplus of Rs630 billion by the end of the year.

 

Bokhari was pleased to report that the IMF has officially recognised Punjab’s efforts to achieve a budget surplus. This was evident by IMF backing the government’s claim regarding the surplus.


Additionally, Bokhari also addressed claims that had been circulating against the government. Said claims suggested that the provincial government had invested in a United Arab Emirates (UAE) based fund.

 

The minister, however, firmly refuted the same, stating that no such matter had been discussed during the IMF’s meetings with officials from the government of Punjab.

 

It may be noted that the reason for the shortfall of surplus in the previous quarter of the fiscal year was primarily the repayment of commodity related loans that had reduced the amount of money the provincial government could post as surplus.

 

However, owing to the repayment of the loan, the next surplus will be greater by a large magnitude. This is due to the fact that interest payments will not have to be doled out on the expired loans. Besides that, reports said, the funds that had been used to clear the loans can now be booked as a budget surplus.


This endorsement from the IMF spells great news as it comes at a time when the federal government in Islamabad is missing its objectives set out by the IMF. For instance, Islamabad failed to the IMF stipulated condition that was set to ensure that the Federal Board of Revenue (FBR) would collect at least Rs2.652 trillion in taxes.


Moreover, the FBR was supposed to collect at least Rs10 billion rupees from traders as per one of the 40 IMF conditions. However, the government failed to meet the target by almost one million per cent. This was because the FBR was only able to collect a measly Rs1 million from traders.


While assurances from the IMF for achieving a cash surplus of 40 billion rupees is likely to motivate Punjab’s lawmakers to continue following the roadmap set out by the global lender, the government is also showing a willingness to strictly adhere to austerity measures.

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