Islamabad, Pakistan – The International Monetary Fund (IMF) has raised serious concerns over the Pakistani government’s issuance of Rs344.64 billion in supplementary grants during the current fiscal year without obtaining prior approval from the National Assembly, calling the move a breach of the ongoing Extended Fund Facility (EFF) agreement.
Key Issue: Violation of Fiscal Discipline
The IMF emphasized that this unapproved spending contradicts the fiscal discipline measures agreed upon under Pakistan’s bailout programme. According to official sources, the government is now seeking post-facto approval from the National Assembly, but the IMF views the move as a violation of parliamentary oversight and transparency standards.
Major Allocations of Supplementary Grants
The supplementary grants were distributed across various critical sectors:
1. Power Sector: Rs115 Billion to IPPs
The largest portion — Rs115 billion — was directed to Independent Power Producers (IPPs). This sector has long been under IMF scrutiny due to its financial strain on the national budget.
2. Defense Spending: Rs59 Billion
A significant Rs59 billion was allocated for defense purposes, raising further questions about fiscal priorities amid a struggling economy.
3. Flood Relief in Sindh: Rs30 Billion
To support disaster relief efforts, Rs30 billion was earmarked for flood recovery initiatives in Sindh, one of the worst-affected provinces.
4. Agricultural Tube Well Solarisation: Rs14 Billion
In a bid to reduce electricity costs for farmers, Rs14 billion was granted to promote the solarisation of agricultural tube wells.
5. Counter-Terrorism Capacity: Rs23 Billion
The Pakistan Army’s anti-terrorism operations received a substantial boost with Rs23 billion in additional funding.
6. Technology & Mining Projects
- Technology Upgrades: Rs2 billion
- Reko Diq Mining Project: Rs3.7 billion
- Special Investment Facilitation Council (SIFC): Rs520 million
7. Parliamentary Development Schemes & FBR
- Development projects tied to MPs: Rs7 billion
- Federal Board of Revenue (FBR): Rs6 billion across various initiatives
Other Departments Included
Supplementary funds were also disbursed to key federal entities including the Supreme Court, Islamabad High Court, and Ministry of Interior, as part of the overall Rs344.64 billion allocation.
IMF Reaction: Undermining Accountability
The IMF has termed these actions as a direct violation of the fiscal transparency and governance commitments that Pakistan pledged under its loan programe. The Fund is expected to press for corrective measures in upcoming review meetings, especially given the looming economic challenges and the need for international credibility.
Why This Matters
This development could jeopardize Pakistan’s future disbursements under the IMF programme and further erode investor confidence. As the country grapples with economic instability, such fiscal maneuvers could draw criticism both domestically and globally.
