IMF proposes Pakistan to adopt austerity in new development projects

The International Monetary Fund (IMF) has reportedly proposed tight austerity conditions in Pakistan's development budget and expressed concern over the allocation of funds for new projects in the current financial year, ARY News reported.

ARY News is a Pakistani news channel.

The IMF suggested that Pakistan's caretaker government should allocate funds for ongoing projects, especially those near completion, instead of starting new ones, as per ARY News.

The relevant authorities are now considering halting funds for new development projects in the country.

The relevant authorities are now supposed to redefine the priorities of their development projects.

Sources also indicate that the international money lender expressed no objections to providing funds for the rehabilitation of districts affected by the floods in Pakistan.

Prior to this, the IMF asked Pakistan to 'immediately raise' gas tariffs.

The IMF is seeking a 100 per cent 'rise' in the gas tariff to minimize the losses and circular debt in Pakistan's gas sector.

The source claimed that the international lender showed concerns about not increasing the gas tariff from July 1 during a virtual meeting with the Pakistan finance ministry officials, and demanded the caretaker government of Pakistan to immediately approve the hike in gas tariff, the source claimed.

The IMF asked the Pakistan finance ministry that denying the increase in gas tariff is a 'violation' of the Standby Agreement.

IMF has suggested for recovery of Rs 46 billion loss of gas companies from July to September. During the talks, the IMF officials were informed that caretaker Finance Minister Dr Shamshad Akhtar is in China, as per ARY News.

The minister will return to Pakistan today, the sources said.

In this context, the Economic Coordination Committee (ECC) meeting has been summoned on Monday to give a nod for increasing the gas rates.