ISLAMABAD: Former President Asif Ali Zardari met Prime Minister Shahbaz Sharif in which the overall political and economic situation of the country was discussed.
In a meeting held at Prime Minister House Islamabad, President of Pakistan Muslim League (N) and Co-Chairman of Pakistan People’s Party (PPP) discussed the economic decisions expected to be made after the economic recovery and politically challenging decisions. Determined strategy regarding decisions. by the Prime Minister in an attempt to revive the stalled International Monetary Program (IMF) loan program.
Finance Minister Senator Ishaq Dar, Economic Affairs Minister Sardar Ayaz Sadiq and Railway Minister Khawaja Saad Rafique and Pakistan Peoples Party (PPP) Senator Saleem Mandviwala were also present in the meeting.
The two leaders also discussed the political scenario of Punjab and Khyber Pakhtunkhwa after the establishment of caretaker governments. Their participants agreed that revitalizing the economy should be a priority of the coalition government.
Sources say that Finance Minister Ishaq Dar gave a briefing to the participants regarding the economic situation and explained the impact of tough decisions. However, the participants decided to ensure a mechanism that would keep inflation under control.
Tough decisions
The tough decisions required to revive the IMF program include raising electricity and gas rates, increasing tax collections, implementing a petroleum development levy, market-based dollar rates and more.
On Wednesday, the rupee fell further against the dollar, depreciating by around 1%, after the unofficial cap on the greenback was lifted.
The rupee fell 2.25, or 0.92 percent, to close at 243 against the dollar, the Exchange Companies Association of Pakistan (ECAP) said in a statement, against a range of 237.75-240 at Tuesday’s close.
Gas tariff is also expected to increase from an average of Rs 650 per mmbtu to Rs 1100 per mmbtu, reports JEE News.
The government plans to collect Rs 800-850 billion through new price hikes to control the horrendous revolving debt of SNGPL and SSGCL of Rs 1,640 billion.
Meanwhile, in the power sector, the government is considering increasing electricity rates to Rs 4.50 per unit in the first phase and Rs 3 per unit in the second phase within the current financial year.
The government’s FBR tax collection target was Rs 7470 billion, but the FBR remained short by Rs 225 billion till December. Collections missed the IMF’s target by the end of December 2022 by a margin of Rs 82 billion.
The PML-N government plans to impose a 1%-3% flood levy on imports to raise Rs 100 billion.
Secondly, the government is also considering imposing a 60% to 70% tax on alleged earnings of commercial banks through exchange rate manipulation. In the first nine months of the calendar year 2022, banks made extraordinary profits of around Rs 100 billion.
A hike in Federal Excise Duty (FED) on sugary drinks, and a GST slap on cigarettes and POL products are also on the cards. However, in the recent past, Finance Minister Ishaq Dar strongly opposed the imposition of 17 percent GST on POL products, arguing that it would lead to hyperinflation.
