Defence and development budget likely to be axed
The International Monitory Fund’s programme is going to be very tough and painful for Pakistan in coming days, said Dr Ashfaq Hassan Khan, a member of the Economic Advisory Council, in an exclusive interview with SAMAA TV.
Dr Khan is the principal and dean of the School of Social Sciences and Humanities at National University of Science and Technology.
“The basic purpose of the IMF programme is to choke Pakistan’s economy and restrict its GDP growth,” he remarked. He predicted that the GDP growth will be restricted to 2% to 2.5 %. “This is the game plane.”
It is going to be a painful path for Pakistan. It will be full of difficulties as the Pakistani government will have no other option but to take some tough measures to meet the IMF’s conditions as prior actions. “These prior actions include exchange rate adjustments, increase in electricity and gas tariff and tax measures in the upcoming 2019-20 budget,” he said.
The FBR is likely to collect Rs 3950 billion rupees tax revenue during the ongoing fiscal year 2018-19 and if the government sets an annual target in between Rs 5,300 billion to Rs5,400 billion for 2019-20, it means 38 % growth in tax revenue for New Year, which is not possible, he said. If the government fails to meet its tax revenue target then it will have to cut down the defence and development budget, which would be very difficult for them, he added.
Dr Khan said that the Prime Minister Imran Khan initially was a strong opponent of the IMF because he knew that it will add the difficulties of the common man through inflation and unemployment, but later his close aides forced him to knock the door of the international lender.
“In Economic Advisory Council, headed by the Prime Minister, I was the only member who opposed the proposed IMF programme from day one, but the rest of the members supported the loan idea,” he said.
He was of the view that under the IMF programme Pakistan’s industry will suffer a lot and it would be cheaper to import instead of producing things in the country.
IMF board will not give approval of the staff-level agreement until the government meets all these prior actions, Dr Khan added.