Subsidies
KARACHI: Finance Minister Muhammad Aurangzeb emphasized that the International Monetary Fund (IMF) does not oppose subsidies outright but rather advocates for targeted subsidies to be increased.
Addressing misconceptions during a visit to a Utility Store in Karachi’s upscale Defence neighborhood, Aurangzeb clarified that the IMF’s stance revolves around discouraging untargeted subsidies while promoting enhancements to those aimed at specific demographics.
He underscored that Pakistan’s engagement with the IMF is part of a broader effort to address economic challenges and bolster the country’s financial stability.
The objectives include augmenting the tax-to-GDP ratio, tackling circular debt, and reforming state-owned enterprises.
Aurangzeb emphasized that these reforms are essential for Pakistan’s economic well-being and are aligned with the IMF’s recommendations.
Since the approval of a $3 billion bailout package in June of the previous year, Pakistan has undertaken several reforms mandated by the IMF.
These measures encompass budget adjustments, increased interest rates, and elevated energy prices.
The country is tasked with achieving gradual fiscal consolidation, broadening the tax base, enhancing tax administration, and ensuring debt sustainability while safeguarding vulnerable segments of society.
Aurangzeb stressed the significance of focusing on exports to bolster foreign exchange reserves, highlighting the agricultural sector’s potential in achieving self-sufficiency and reducing reliance on imports.
Regarding the Ramazan Package, Aurangzeb noted Prime Minister Shehbaz Sharif’s decision to augment its funding to Rs12.5 billion to provide essential items to vulnerable groups at subsidized prices.
He affirmed the government’s commitment to maintaining the quality of food items available at utility stores and highlighted the establishment of 1,200 mobile points for distributing essential items during Ramadan.
Responding to a suggestion on philanthropic donations to the Utility Stores Corporation, Aurangzeb welcomed the proposal, urging the generous philanthropists of Karachi to contribute towards assisting the less privileged.
He emphasized the longstanding tradition of philanthropy in the city and its potential to complement government efforts in providing essential support to those in need.
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