Budget preparations for the new fiscal year have encountered delays as the Finance Ministry grapples with negotiations for a potential new bailout package from the International Monetary Fund (IMF).
The agreed schedule for budget preparation, including the submission of the budget strategy paper and Annual Plan Coordination Committee meetings, could not be followed due to the impending arrival of an IMF delegation.
Finance Ministry officials claim the upcoming IMF mission will be consulted on the new budget. In connection with negotiations for a new bailout package with Pakistan, an IMF delegation is reaching Pakistan later this month.
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The budget strategy paper was originally slated for completion and approval by the federal cabinet by April 22. Moreover, even the budget strategy paper for the next three years, 2024-2027, has yet to be completed. Annual Plan Coordination Committee meetings, crucial for budget determination for all ministries, have also not been held despite being scheduled for the first week of May.
As per the sources, the National Economic Council meeting is set for the second week of May, while the completion of budget documents for cabinet approval is targeted by month-end.
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The budget is expected to be tabled in parliament in the first week of June, after all the budget documents have been approved by the cabinet. According to sources, the government wants to take tough decisions in the new budget as per the IMF guidelines.
Proposed changes in the budget include increased costs for electricity, gas, and taxes across various sectors, especially real estate. Additionally, measures against benami property ownership are proposed, with a focus on allocating development funds solely for ongoing projects.
The delay in budget preparation underscores the government's commitment to adhering to IMF stipulations while striving for economic stability and reform. As negotiations with the IMF continue, Pakistan faces critical decisions aimed at ensuring fiscal sustainability and growth in the coming fiscal year.
