Pakistan receives $4.5 billion from IMF as committee demands results

The National Assembly Standing Committee on Finance and Revenue called for a detailed assessment of Pakistan’s 7 billion dollar programme

Islamabad:  The National Assembly Standing Committee on Finance and Revenue called for a detailed assessment of Pakistan’s 7 billion dollar programme with the International Monetary Fund. The committee stated that completing IMF conditions alone is insufficient; the government must demonstrate whether the reforms are producing real benefits for the economy, taxpayers and ordinary people.

The committee met under the chairmanship of Syed Naveed Qamar and reviewed the implementation of Pakistan’s Extended Fund Facility programme with the IMF. The discussion covered government spending, tax collection, energy reforms, provincial finances, structural reforms, climate commitments and austerity measures.

The Finance Secretary told the committee that the IMF programme was approved on September 25, 2024, with a total value of 7 billion dollars. Pakistan has so far received about 4.5 billion dollars, while three programme reviews have been completed.

Officials said the programme is meant to support Pakistan’s balance of payments needs and economic stability. It also requires reforms in tax collection, debt management, government spending, the energy sector, state-owned enterprises and trade.

The committee said the IMF programme should not be judged only by whether Pakistan has formally completed the conditions set under it. Members wanted to know what the reforms have actually achieved and whether they are improving economic and social conditions.

The committee asked for clearer information on implementation timelines, pending IMF commitments, government spending and the effect of reforms on citizens, businesses and taxpayers.

Chairman Syed Naveed Qamar stressed that economic reforms should be based on a clear, transparent and sustainable strategy. He said fiscal consolidation should be accompanied by policies that support investment, exports, employment and sustainable economic growth, particularly when reforms could create additional costs for consumers and businesses.

The committee reviewed key IMF commitments, including parliamentary consideration of extra government spending beyond approved budgets, restrictions on new tax amnesties and preferential tax treatment, energy sector reforms and implementation of the National Fiscal Pact with the provinces.

Members also examined government budget targets, provincial finances and how provincial spending fits into the overall fiscal plan. Officials highlighted commitments related to human development, social protection and minimum spending levels for health and education.

The chairman gave particular attention to spending in the social sectors. The committee wanted the government to show what health and education spending had actually achieved instead of simply reporting how much money had been spent.

Tax collection was another major part of the IMF review. The committee examined the retailer tax registration scheme and questioned its limited initial participation.

Members asked for figures showing how many retailers had registered, how much tax had been collected, whether compliance had improved and whether changes to the design of the scheme were needed.

The committee directed the Finance Ministry to evaluate the scheme over a fixed period and measure it against clearly defined targets. The role of the Federal Board of Revenue in implementing the scheme was also discussed.

Energy sector reforms linked to the IMF programme also came under scrutiny. Members asked for data on industrial captive power users that had moved to the national electricity grid. They wanted to know how the change had affected gas and petroleum use and the country’s circular debt.

The committee stressed that energy reforms should be judged by their actual financial and operational results rather than by completion of paperwork or administrative targets.

The committee also examined climate-related reforms under the IMF Resilience and Sustainability Facility. Members were told that seven reforms had been reported as unmet and asked whether delays could increase costs for consumers, including through carbon-related measures.

The Finance Secretary briefed members about reforms involving climate screening of public investment, climate tagging in budget documents, disaster risk financing, climate-related financial risk management for banks and incentives for private companies to develop electric vehicle charging infrastructure.

Members questioned whether completing a policy benchmark on paper should be considered the same as actual implementation. They specifically asked for evidence showing that electric vehicle charging facilities were being built and working on the ground instead of simply completing the administrative process.

The committee said any government support for private investment should be linked with measurable progress, open bidding and clear eligibility rules.

Austerity measures connected with fiscal discipline were also discussed. The committee reviewed a temporary 50 percent reduction in fuel provision for official vehicles, with certain operational exemptions, along with a 5 percent reduction in the non ERE budget for the financial year 2026 and 2027.

The budget reduction was estimated to save about Rs16.1 billion. Members wanted evidence of the actual savings produced by the austerity measures and questioned whether they were delivering meaningful financial benefits.

The committee concluded that future briefings on the IMF programme should provide one complete picture of outstanding IMF conditions, provincial spending results, tax collection, energy reforms, climate commitments and austerity savings.

Members also asked for clear deadlines, measurable performance indicators and complete financial information so Parliament can judge not only whether an IMF condition has been completed but also whether it has produced a real economic or social result.