ISLAMABAD: The coalition government is set to announce an important relief package for the consumers across the country in the wake of devastating floods in Pakistan which inflicted $28 billion worth damages to the national economy.
From Wednesday (Sept 28), after taking oath as Finance Minister, Ishaq Dar will prepare a relief package which will either be announced by the prime minister or Dar in October.
For this package, the government had already got a go-ahead from the International Monetary Fund.
The proposed package, as per sources, includes zero tax on petroleum products, no further collection of fuel cost adjustment (FCA) at least for three consecutive months. At present, the FCA collection in electricity bill is equal to 40 percent of the cost of the bill every month.
Additionally, the International Monetary Fund has agreed to the government’s demand of releasing $1.1 billion next tranche anytime in October to support dwindling foreign exchange reserves and value of rupee against dollar and other major currencies in the inter-bank and open market trading.
Furthermore, the government will also get relaxation in the agreed limit of the current account and the fiscal deficits in 2022-23 because the government would have to import food items to avoid their shortage in the country in the wake of recent catastrophic rains and floods.
Meanwhile, the coalition government is also trying its best to arrange more assistance from the friendly countries in kinds and cash to provide relief to the flood-hit people and to gear up their rehabilitation process.
In order to meet food items demand, the government has planned the import of wheat and rice to avoid their shortage while cotton is also being imported by the textile sector to maintain exports.
According to sources, Pakistan government will get at least $10 billion worth foreign loans rescheduling in 2022-23, IMF will provide another $1.1 billion in October while the World Bank, ADB and friendly countries will also extend financial assistance which will enable the government to stabilise the foreign exchange reserves, value of rupee, revive economic growth, and provide much-needed relief to the masses.
Rescheduling of $10 billion worth foreign loans payable in 2022-23 means the country would not be under pressure to pay these loans in the ongoing fiscal year.
According to Miftah Ismail, Pakistan needed $21 billion for repayment of external loans in 2022-23. However, as per the recommendation of the UNDP, the government is initiating the process of foreign loans rollover with the creditors, excluding commercial loans. Out of $21 billion payable loans in FY23, the government has identified $10-11 billion loans which can be rescheduled.
