Government’s Fiscal Strategy Unveiled Cuts, Pension Reforms, and IMF Talks in Focus
the plan aims to reduce expenditures in the next fiscal year, with the federal government not establishing any new universities and provinces funding varsity under their jurisdiction.
In the next fiscal year, a contributory pension scheme is planned for all departments, except defense and police personnel. The scheme came as the global lender has asked the government to review its pension system.
Sources added that there is a possibility of a complete ban on development schemes for parliamentarians from the next fiscal year, and the federal government will not fund ongoing projects with the cooperation of provinces.
Furthermore, the government is also planning to abolish posts from grades 1 to 16, which have been vacant for over a year.
Earlier in the day, it was reported that the International Monetary Fund (IMF) and Pakistan will begin policy-level talks on the bail-out package today.
The Fund had asked Pakistani authorities to impose tax on monthly pensions exceeding Rs 100,000.
The monetary fund demanded stringent economic measures for new loan programs and legislation aimed at taxing wealthy pensioners.
According to sources, Pakistan has no alternative plan to the IMF loan program, and the government will need to implement the agreed-upon reforms to secure the loan.
Sources said that the new program aims to reduce subsidies from Rs 1,550 billion to Rs 800 billion and limit gas subsidies.
Additionally, electricity prices may also increase by 10-12%, and retail businesses will be required to document sales and prevent tax evasion, sources added.
Non-filers will face increased difficulties under the new program, and the government will need to take decisive action to address the economic challenges the country is facing.
