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New Delhi [India]February 2 (ANI): Former Indian diplomat Mahesh Sachdeva said on Thursday that the rejection by the International Monetary Fund (IMF) of Pakistan’s revised Revolving Debt Management Program (CDMP) is a symptom of the situation in Pakistan.
Economically, the country has been facing headwinds, he said.
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“Pakistan’s own economic mismanagement and economic policies are back to plague the country,” he said.
“In a way, the $7 billion extended financing facility that Pakistan is seeking from the IMF is no different than our own UDAY 1, UDAY 2 program, but the context is very different,” the former diplomat told ANI.
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He said that while India solved the problem by itself, Pakistan had to go to the IMF for funds to pay the discoms, which then paid the power generation companies and so on. So, it becomes circular debt management.
IMF review team rejects Pakistan’s revised Revolving Debt Management Program (CDMP). It called on the Pakistani government to raise electricity tariffs to the range of Pakistan Rupee 11-12.50 per unit (PKR) to limit additional subsidies of PKR 335 billion this fiscal, News International reported.
The IMF review team, led by Nathan Porter, arrived in Islamabad on Monday. The two sides will continue to hold talks to complete the upcoming Ninth Review under the $7 billion Extended Fund Facility (EFF).
According to international news reports, revolving debt occurs when an entity facing cash inflow problems does not pay its suppliers and creditors.
The IMF called the revised CDMP “unrealistic” and was based on some faulty assumptions. According to international news reports, the Pakistani government will have to change its policy regulations to limit losses in the power sector.
The IMF and Pakistan’s Ministry of Defense will find the fiscal shortfall, after which various additional tax measures will be finalized through the upcoming mini-budget.
The revised CDMP calls for an increase in revolving debt to Rs 95,200 crore for the current financial year, compared to the previous forecast of Rs 1,526 billion.
On Wednesday, the Pakistani government shared the revised CDMP with top IMF officials.
The Pakistani government’s revised CDMP shows that despite the quarterly tariff adjustment for the first two quarters of 2023 and the increase in electricity tariffs to PKR 7 per unit for the third quarter starting in June, the government still needs an additional subsidy of Rs 675 billion to PKR 8. moon. (Arnie)
(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)
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