By Staff Reporter
ISLAMABAD: Pakistan’s lower house of parliament approved a revised budget for the next fiscal year on Sunday, with additional fiscal tightening to meet the International Monetary Fund’s (IMF) conditions for a $1.2 billion loan tranche.
The parliament passed a revised budget of Rs14.48 trillion rupees for the fiscal year 2023/24, with new taxes and spending cuts.
The budget, which was presented by Finance Minister Ishaq Dar earlier this month, was approved by a voice vote in a session that lacked quorum, as most ruling coalition members stayed away.
Only 72 out of 342 members of the National Assembly, or lower house of parliament, were present when the budget was passed, according to state-run Pakistan Television.
Foreign Minister Bilawal Bhutto Zardari, son of former Prime Minister Benazir Bhutto who was assassinated in 2007, did not attend the session, nor did his father Asif Ali Zardari, a former president of the country.
Finance Minister Ishaq Dar said the government had raised its revenue collection target by Rs215 billion rupees and reduced its expenditure by Rs85 billion rupees to shrink the fiscal deficit to 6.3 percent of gross domestic product (GDP).
Dar said the budget was aimed at putting the country on the path of development and economic stability, which he credited to the political sagacity of Prime Minister Shehbaz Sharif, who took over after the then opposition parties ousted his brother Nawaz Sharif was ousted by the Supreme Court in 2017 over corruption charges.
“We put our political capital at stake to stabilize the economy,” Dar said in his speech before the vote.
The budget, which will take effect from July 1, also includes a number of other reforms in the pensions scheme and a controversial tax amnesty scheme that the IMF had objected to.
The budget will now be sent to the Senate, or the upper house of parliament, for approval. The Senate cannot reject the budget but can suggest amendments, which are not binding on the government.
Pakistan is facing an acute balance-of-payment crisis, with its foreign exchange reserves barely enough to cover a month of imports. It has been trying to secure the IMF funds before its $6.5 billion Extended Fund Facility agreed in 2019 expires on June 30.
The IMF programme has been stalled since November, when the global lender publicly questioned Pakistan’s budgetary measures and said they missed the opportunity to broaden the tax base and reduce tax exemptions.
The IMF also raised concern that the tax amnesty scheme ran against the Fund’s programme conditions and governance agenda and created a damaging precedent.
The government said these issues had been addressed and he expected a breakthrough announcement from the IMF over the next few days.
“Almost all the irritants between the IMF staff and the Ministry of Finance were resolved hours before the finance minister’s wind-up speech on Saturday,” an official at the finance ministry said, requesting anonymity.
He said it was now up to the IMF mission to line up the dates for the lender’s executive board approval and disbursement of funds.
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