The Strategist

IMF prohibits Pakistani authorities from resuming electricity consumption subsidies

09/06/2023 - 10:22

The IMF insists that the money to be used for subsidies should be returned to the budget by raising tax collection in the nation, according to The Express Tribune.

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The interim administration of Pakistan requested that state subsidies on power bill payments resume, but the International Monetary Fund (IMF) denied their proposal.

The IMF reportedly advised the authorities to reevaluate the proposed plan since it thinks the state subsidies will cost Rs. 15 billion ($48.9 million), not Rs. 5 billion ($16.3 million), as the Pakistani cabinet had said, The Express Tribune writes quoting the Finance Ministry of Pakistan.

The IMF also asks that greater tax collection in the nation be used to recoup the money that will be sent for subsidies.

According to the newspaper’s sources, the rise in electricity rates is sparking sizable public demonstrations, with participants burning utility bills as a sign of protest. Power companies are being forced to restrict the amount of electricity supplied and pass on more costs to consumers as a result of rising electricity rates. The interim administration created a proposal to restart state subsidies for electricity use in response. It required necessary IMF clearance, but didn't receive it.



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