Rs344bn Grants
The International Monetary Fund (IMF) has raised serious concerns over the federal government’s disbursement of supplementary grants amounting to Rs344.64 billion during the current fiscal year without securing prior approval from the National Assembly.
The move has been flagged as a breach of the fiscal discipline commitments outlined in Pakistan’s agreement under the Extended Fund Facility (EFF) programme.
According to official documents, the government allocated these supplementary funds across a wide range of sectors including energy, defense, development initiatives, and disaster relief efforts.
The allocations were made in advance, with formal post-facto approval from the National Assembly now being sought retroactively. This procedure, however, has not appeased the IMF, which views such unilateral spending as undermining transparency and the rule of law in financial governance.
Among the most significant allocations, Rs115 billion was issued to Independent Power Producers (IPPs) to address liabilities in the power sector — a recurring point of contention between Pakistan and the IMF due to the chronic financial instability in the energy industry. The Fund has repeatedly emphasized the need for structural reforms in the power sector to curtail the mounting circular debt and inefficiencies.
Defense spending also featured prominently, with Rs59 billion allocated for military purposes. Another Rs23 billion was specifically designated to enhance the Pakistan Army’s counter-terrorism capabilities, reflecting the state’s continued focus on internal security amid ongoing threats from militant groups.
In response to natural disasters, particularly last year’s devastating floods in Sindh, Rs30 billion was earmarked for relief and rehabilitation. Additionally, Rs14 billion was allocated to support the solarisation of agricultural tube wells, a move aimed at reducing energy costs for farmers and promoting sustainable farming practices.
The Reko Diq mining project, a critical initiative for Pakistan’s mineral development, received Rs3.7 billion in additional funds. The Special Investment Facilitation Council (SIFC), a body tasked with streamlining investment, was granted Rs520 million. Another Rs7 billion was disbursed for various development schemes associated with parliamentarians, drawing criticism for politically motivated spending.
The Federal Board of Revenue (FBR) also received Rs6 billion to support its operational needs, while other expenditures included funding for the Supreme Court, Islamabad High Court, the Ministry of Interior, and various other federal departments.
The IMF’s objection to these unauthorized expenditures signals a potential strain in Pakistan’s ongoing negotiations with the global lender, especially as the country seeks continued financial assistance and the renewal of its bailout programme. The incident underscores the pressing need for stricter adherence to fiscal protocols and improved parliamentary oversight in public spending.
