ISLAMABAD: According to sources, the federal government presented an alternative relief plan to the International Monetary Fund (IMF) in an effort to alleviate the burden of electricity bills on the general public on Tuesday.
Under this new proposal, the government intends to utilize the Rs15 billion initially allocated for payments to Independent Power Producers (IPPs) to provide relief in electricity bills. The plan entails collecting this sum in installments from consumers and subsequently repaying it to the IPPs.
The government, as part of this revised plan, has assured the IMF that it will not grant any relief outside the established budgetary framework. It’s worth noting that the IMF previously rejected the government’s initial proposal, expressing concerns about a potential Rs15 billion revenue gap that might arise as a consequence.
According to sources, the government’s estimation suggests that offering relief on consumers’ electricity bills would result in a revenue impact of less than Rs 6.5 billion. However, the IMF declined the proposal based on a higher estimated impact.
The government currently finds itself in a challenging position, facing ongoing protests against inflated electricity bills. Additionally, it lacks the mandate to make significant policy decisions as it operates within an interim setup.
IMF Rejects Govt’s Plan For Giving Relief To Power Consumers, Seeks A Revised Plan
Earlier, The IMF rejected the interim government’s electricity relief plan. The IMF has noted a disparity in the allocated funds for its implementation.
The IMF has sought a revised plan to provide relief to electricity consumers.
A few days ago, the caretaker government sent a plan to the IMF seeking approval for relief for the consumers.
However, the fund officials have rejected the plan, asking the government to revise it to avoid slippage in revenue.
Interim Prime Minister Anwaarul Haq Kakar has given two different deadlines that expired without relief to the masses.
IMF rejects the government’s plan for giving relief to power consumers.
The government’s assessment indicated that the relief proposed for consumers’ bills would have a revenue collection impact of less than Rs 6.5 billion. In contrast, the IMF projected that the plan would result in a revenue collection impact exceeding Rs15 billion, sources said.
Therefore, the IMF has requested Pakistan to provide a plan to bridge the financial gap, which the country is expected to submit once more.
This time, the interim government has assured the IMF that it will adhere to the budget while providing relief to the public. Furthermore, the proposal for bill payments in installments will be reintroduced in discussions with the lender.
